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SUL has delivered two strong results since last August ’25 but economic conditions have weighed on the stock, we liked Februarys result Here. This is a company MM likes and we held the stock in both our Active Growth & Income Portfolios through 2025, managing to take a profit on both as the sector crumbled with the RBA adopting a hawkish stance on interest rates.

LOV missed expectations when it reported in February Here and the stocks suffered accordingly. We like to buy companies that are performing well but are being dragged lower by conditions out of their control, especially for a stock like LOV which is trading on 27x - its priced for growth which its now starting to find increasingly hard.

SUL delivered a sold 1H result in late February Here, pushing the stock up over 8% which importantly pointed to a clear improvement in trading momentum early in the second half, before the war! The retail sector has struggled through March as the war pushes up inflation concerns, bond yields and the prospect of three RBA rate hikes before Christmas.

We covered JBH after their 1H result last month Here. While we admire JBH as a business we remained on the sidelines during its “certainty trade” blow off top around $120 and during most of its subsequent 40% pullback, but we believe the stock now looks appealing from a risk/reward perspective, finally trading back around its long term average valuation, and ~20% below its 2-year average. This is a great example of how stocks go in and out of favour while nothing operationally changes while in this case an economic slowdown and higher interest rates already look priced in.

We discussed NCK las month after a soft January update saw the stock slide lower - Here. The update raised concerns about slowing discretionary demand, despite a better-than-expected 1H result. The market is focused on weaker forward sales, with modest growth suggesting the 2H26 order book may miss expectations as higher rates and demand pull-forward weigh on the shares/sector.

PMV -4.31%: delivered a softer 1H result with profit down year-on-year. The market initially responded positively to improving momentum in Peter Alexander and signs management is addressing the underperformance at Smiggle, though the stock traded lower through day, with a -12% swing and closing lower on the session.

FMs are holding their lowest exposure to consumer discretionary since late 2022, with rising inflation expectations not helping. Elsewhere, FMs bought healthcare, staples, and energy while reducing discretionary retail, banks and insurance - a net defensive move. If/when the Iranian conflict does get resolved, buying is likely to return to the retailers on the hopes that inflation concerns will fall.

Rate-sensitive stocks have endured a shocking start to 2026, with the consumer discretionary sector (-13.8%) front and centre, especially considering the ASX200 has only slipped 1.2%, even with war raging in the Middle East. Amongst the sector itself, there have been no winners with a 7% retreat by Wesfarmers (WES) and 11% pullback by Premier Investments (PMV), the top performers, while Temple & Webster (TPW) -53% and Nick Scali (NCK) -33% are carrying the wooden spoon at this stage.

Treasury Wine Estates (TWE) is a well-known global wine company that produces and markets premium brands such as Penfolds and 19 Crimes across key markets including Australia, the US and Asia. The companies report last month was a sorry read, struggling with structural headwinds, i.e. people are drinking less. The stock fell ~5% on the release (Covered Here) and has lost another ~15% over the last few weeks, not helped by the news of CFO Stuart Boxer's retirement this week.