How Weather Could Wreck Retail’s Holiday Quarter

With inventories inflated and consumers tightening wallets, a mild December could turn seasonal merchandise into stranded assets.

Image Source: NOAA

🧭 The Setup: Retailers Are Stocked Up — Maybe Too Much

From Ralph Lauren to American Eagle, retailers have loaded up on goods ahead of this year’s holiday season. Some of that was tactical — importing early to avoid tariffs — but the side effect is clear: inventories are running hot.

According to the Wall Street Journal, apparel inventories rose an average of 6% year-over-year in Q2 2025, with footwear, discount, and specialty retailers up as much as 11%. The logic made sense when demand looked resilient, but the timing is tricky:

• Inflation remains stubborn

• Labor markets are softening

• Consumers plan to cut holiday spending by 5% (PwC)

“Nothing can derail a brand elevation journey like too much inventory,” said Ralph Lauren CFO Justin Picicci.