RBC Capital Markets is pointing investors toward a narrow list of retail names it believes will fare best in 2026, urging a preference for defensive, high-margin businesses as an uncertain macro backdrop - shaped by geopolitical tensions and elevated energy costs - clouds consumer prospects.
The firm says the retail winners will be those with robust balance sheets, clear pricing power and the operational flexibility to adapt quickly to changing demand. These characteristics, according to RBC, will separate outperformers from laggards as the year progresses.
Inditex
RBC restated its outperform rating on Inditex, pointing to the group’s vertically integrated and highly responsive supply chain as a structural advantage. That integration, the broker says, enables the retailer to accelerate or decelerate production rapidly, which supports strong full-price sell-through and limits the need for markdowns.
Those dynamics contribute to operating margins around 20% and returns on capital close to 30%, metrics RBC highlights when describing Inditex’s defensive earnings profile. The broker also notes potential sourcing cost tailwinds and expects a free cash flow improvement following a period of heavy logistics investment. Taken together with what RBC deems durable high single-digit earnings growth potential, the firm views the stock as a long-term compounder with defensive qualities.
The UK Retailer
Also rated outperform, the unnamed UK retailer is favored by RBC for a combination of resilient online and international expansion, disciplined cost control and steady cash generation. The broker argues that the shares carry attractive valuation support versus peers, and that continued digital growth and overseas scaling give visibility on future profit expansion.
In an environment where consumer demand may be under pressure, RBC points to the company’s capital-light operating model and consistent execution as key strengths. These attributes lead the broker to rank the retailer among its preferred retail picks for 2026.
Takeaway
RBC’s recommendations center on retail operators that combine margin resilience, supply chain agility and capital discipline. The broker believes such traits will be critical as geopolitical and energy-related headwinds complicate the consumer outlook and testing operating performance across the sector.