The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has posted a solid year to date.
The index has risen more than 12% on the back of a retail sales surge.
According to the ABS, Australian retail turnover rose 1.2% in June 2025, according to seasonally adjusted figures.
Retail and consumer discretionary shares can benefit from low interest rates.
With experts tipping interest rates to continue falling, consumer discretionary shares could be set to benefit because lower borrowing costs encourage consumers to spend more on non-essential goods and services.
Additionally, companies in this sector benefit from cheaper financing, which can boost profits and expansion.
One consumer discretionary share tipped to perform is Universal Store Holdings Ltd (ASX: UNI).
Style points for Universal
Universal Store Holdings Ltd is a specialty retailer of youth casual apparel. It offers casual apparel, footwear, and accessories to the customers. The company brand portfolio includes Champion, Perfect Stranger, Tommy Jeans, Kiss Chacey, Thrills, Barney Cools, and others.
Over the last year, it has emerged as a share market winner, rising more than 40% in that span.
For context, the S&P/ASX 200 Consumer Discretionary Index (ASX:XDJ) has risen roughly 20% in that same period.
Its H1 FY25 Results showed underlying EBIT reached $35.4 million. This marked an increase of 14.9%, driven by sales growth, improved gross margins, and effective cost control
Furthermore, Universal offers an attractive dividend yield of 4.92%.
Attractive price target
Brokers seem to believe there is more room to run on this consumer discretionary share.
Macquarie has placed an outperform rating on Universal Store with a price target of $9.80.
Bell Potter has a "buy" recommendation and price target of $9.90.
From yesterday's closing share price of $8.52, these price targets indicate upside between 15-16%.
Not bad for a high dividend stock that has already climbed significantly in the last year.
