Believe it or not, this is an article about stocks.
According to a Morgan Stanley report, the American female demographic has been and is positioned to spend more in the coming decade or so, which will be a tailwind -- among other tailwinds and some headwinds -- to a particular list of companies.
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Well-documented research has come out in the past few years showing rising divorce rates in the U.S. Morgan Stanley economists say "the percentage of married people is declining 30-40 basis points annually, and divorce rates for people over 55 are rising."
The report added that single women in the U.S. are expected to grow at a 1.2% annual growth rate through 2030, outpacing the grow rate of the broader American population of 0.8% through 2030. By that year, 45% of prime working age women in the country will be single, according to the bank. That's up from 2018's mark of 41%.
Morgan Stanley, using Bureau of Labor Statistics data, found that "as the proportion of single women rises, their labor force participation rate should increase." The report said single women are already spending at a higher clip than s the average American household.
Naturally, with more money to spend, it will be consumer discretionary companies that will see a tailwind. While this will be a tailwind for those companies, "this is likely not enough to offset the drag from an aging population over the next 10 years." Much research shows that the American population has been getting increasingly older, a negative for the revenue of the companies below. Importantly, the other factors that play as tailwinds or headwinds for consumer discretionary stocks are consumer spend and the macro economy, brand trends and competition, health trends in food, and e-commerce as a threat to brick-and-mortar, to name a few.
Here are the companies that could benefit from the tailwind from single women, according to Morgan Stanley.
- Lulu Lemon (LULU) - Get Report
- Nike (NKE) - Get Report
- Ross Stores (ROST) - Get Report
- TJX (TJX) - Get Report
- Ulta Beauty (ULTA) - Get Report
- Chipotle (CMG) - Get Report
- Starbucks (SBUX) - Get Report
For the clothing brands and department stores mentioned above, "single people outspend their married counterparts in this segment with an outsized gap among single women," Morgan Stanley said. As for Lulu and Nike specifically, the bank's report said single women go to the gym more then married women do, which does correlate to higher demand for athletic brand apparel.
For the two food-aww-from-home companies, the report said single people in general spend more than do married people.
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