All the consumer needs

The following basket contains three companies that provide key goods and services to the consumers. Given the continuing conflict in the Middle East and high oil prices energy companies like PSX are able to generate extra profits. Additionally large consumer retail chains might win during periods of rising inflation because shoppers look for lower prices and value alternatives. Additionally, the ultra-discounter was added to the basket as it should be certainly the winner during growing inflation and the additional positive factor for it should be the specific niche and locations of the Dollar General shops.

Phillips 66 [Internal score 82/100] is an American downstream energy corporation headquartered in Houston. Phillips 66’s business focuses on refining, transportation, petrochemicals, and renewable fuels. Key business segments of Phillips 66 are: Refining (more than 2,2 mln barr/day), Midstream, Chemicals and Marketing (more than 8500 gas stations across the US). Phillips currently works on the cost optimization and sells non-core assets.

According to the financial report for the 2nd quarter of 2026 revenue increased 53% y-o-y and amounted to $51B. EBITDA margin for the quarter was around 10% level. Net income exceeds $3.7B vs $977 mln for the same quarter in 2025. Company is able to generate positive FCF which is 13% of the revenue. Current FCF level is $6.5B in comparison to negative FCF for the 1st quarter of 2026 equal to $2.8B.

Walmart Inc [Internal score 65/100] is the world’s largest retailer. The company has transformed itself from a traditional chain of discount hypermarkets into a global, technology-driven omnichannel ecosystem that successfully combines physical retail, e-commerce, logistics, and advertising. Main divisions of Walmart are Walmart U.S. (68% of the revenue), Walmart International (18% of the revenue) and wholesale stores Sam’s Club (14% of the revenue).

According to the recent financial report for the past quarter of 2026 revenue increased 5.9% y-o-y and amounted to $188B. EBITDA margin for the quarter was around 7% level. Net income exceeds $7.3B vs $5.4B for the same quarter in 2025. Company was able to generate positive FCF which is 4% of the revenue. Current FCF level is $7.5B in comparison to negative FCF for the 1st quarter of 2026 equal to $1.9B.

Dollar General Corp [Internal score 64/100] is an American operator of a chain of ultra-discount convenience stores (“dollar stores”), Dollar General occupies a specific niche: unlike large hypermarkets, the retailer opens small stores in rural areas and small towns, where it often serves as the sole local seller of basic groceries and everyday goods. Almost 80% of revenue comes from consumables, including food, household chemicals and hygiene products, supporting resilient traffic during crises and high inflation.

In the recent financial report for the past quarter of 2026 company’s revenue increased 5.2% y-o-y and amounted to $11.3B. EBITDA margin for the quarter was around 18% level. Net income exceeds $550 mln vs $411 mln for the same quarter in 2025. Company is able to generate positive FCF which is 3% of the revenue. Current FCF level is $374 mln. Last time FCF was negative in the beginning of 2024.

The current setup links the whole basket: US strikes on Larak Island and Iranian retaliation have pushed Brent back above $90 and kept refined-product supply tight, supporting Phillips 66’s refining margins, while high fuel and food costs are putting more pressure on household budgets. Dollar General’s strong August results already show consumers trading down, while Walmart’s post-earnings sell-off gives a cheaper entry into the same trend. Warsh’s hawkish Jackson Hole speech also leaves a September Fed hike firmly in play, making a quick easing of these pressures less likely.