UBS Reveals Summer's Strongest 'Retail Stocks'! 4 Top Picks That Could Outperform the Market

UBS strategists recently completed a quantitative analysis, selecting four retail stocks with the greatest upside potential and maintaining an optimistic outlook on their future performance.

According to a report by Business Insider, analyst Jay Sole, in a recent note to clients, selected the top retail stocks to watch over the next three months based on three key technical indicators: high enterprise value relative to earnings before interest and taxes (EBIT), elevated price-to-earnings (P/E) ratios, and large intraday price volatility.

The core argument of the report is that retail stocks with higher valuations and greater volatility are most likely to outperform the broader market in the short term.

Below are the four retail stocks UBS favors for summer 2026:

Under Armour (UA-US)

While other sportswear retailers are generally struggling, Under Armour's stock has risen 38% year-to-date, delivering strong performance.

Although its fourth-quarter earnings missed expectations, causing a temporary dip in share price, UBS had previously anticipated a rebound and continues to maintain a bullish stance, expecting future results to exceed market expectations.

Sole stated: "We believe the Under Armour brand remains a significant asset, and compared to past years, the company will be more effective in leveraging its brand value going forward."

Birkenstock (BIRK-US)

Despite notable fluctuations, Birkenstock's stock has gained over 10% year-to-date.

In recent years, American consumers have increasingly favored this brand, once associated with a 'hippie' image, boosting its popularity. UBS believes this growth momentum will not slow down in the near term.

Sole noted that the team expects Birkenstock to continue expanding its global market leadership, forecasting a 13% annual revenue growth rate and a 16% annual EPS growth rate over the next five years—faster than revenue growth.

Boot Barn (BOOT-US)

This retailer, known for cowboy boots and Western-style apparel, has shown relatively weak performance over the past year. Despite delivering strong sales data at the end of 2025, its stock has declined about 10% year-to-date.

However, UBS believes the stock is undervalued by the market and has rebound potential.

Sole stated in the report: "We believe Boot Barn could open 400 new stores over the next five years, and strong sales and EPS growth outlooks are sufficient to justify its higher P/E valuation."

Groupe Dynamite

Canadian apparel retailer Groupe Dynamite is the weakest performer on UBS's retail stock list, with its share price down 38% year-to-date and ongoing store closures.

Nevertheless, UBS remains optimistic about its future sales growth potential, forecasting an 18% annual EPS growth rate over the next five years.

Sole stated: "We view Groupe Dynamite as an attractive growth stock, with its Garage brand serving as a key growth engine, and there remains significant room for market expansion."