The consumer sector's fiscal second quarter is supported by consumers' purchase intent and record-level savings, but they remain "savvier" and willing to trade down where appropriate, said Jarden in a Wednesday note.

The overall outcome was a strong Christmas trading period, although sales were concentrated and heavily driven by promotions, Jarden added.

Jarden expects performance in the period to be led by household goods retailers, including Temple & Webster (ASX:TPW), Harvey Norman (ASX:HVN), JB Hi-Fi (ASX:JBH), and Breville Group (ASX:BRG).

Youth-focused retailers, particularly Universal Store (ASX:UNI), are also expected to perform well, with health-related retailers such as Sigma Healthcare (ASX:SIG) expected to be relative outperformers. However, there is greater risk for more commoditized and structurally-challenged businesses, including Kogan.com (ASX:KGN), Accent (ASX:AX1), and Endeavour (ASX:EDV), the note added.

The investment advisory firm kept SIG as its key defensive growth pick, HVN as the preferred cyclical exposure to the housing market, and Flight Centre (ASX:FLT) as a laggard that could materially outperform. It remains positive on TPW in the home goods sector, while UNI is its preferred stock in fashion retail.

According to Jarden, the most challenged businesses are seen to be EDV, Domino's Pizza (ASX:DMP), and KGN.

Jarden kept a buy rating on TPW and UNI with price targets of AU$19.60 and AU$10.69, respectively.

Jarden has an underweight rating on WES and a neutral rating on JBH with price targets of AU$70.50 and AU$95.20, respectively.

UNI was up almost 3% in recent Thursday trade, while TPW fell past 1%, and JBH lost almost 1%.