Sep. 23 at 12:41 PM
Morgan Stanley analysts said agentic AI could unlock “a total cost savings opportunity of about
$6 billion” for the retail and softlines sector by 2026, boosting overall profitability.
In a new report, the bank introduced its proprietary AI framework for softlines, measuring both potential profit gains (“reward”) and corporate focus on AI (“recognition”). At the midpoint, they estimate cost savings of about
$6 billion from AI-driven efficiencies, lifting 2026 EBIT/EBITDA by 20% on average and margins by roughly 200 basis points.
Gap, Macy’s, and Victoria’s Secret were highlighted as best positioned, with the strongest mix of profit upside and AI focus. By subsector, department stores should benefit most given larger workforces and lower EBIT bases, while brands may see smaller gains.
Among individual stocks, American Eagle, Kohl’s, and Under Armour could enjoy the largest EBIT/EBITDA boosts by 2026, while Amer Sports, On Holding, and Tapestry may benefit the least.
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