The broker came away from its retail conference more upbeat on consumer trends and the outlook for input and labour costs.
RBC Capital Markets has flagged a strong chance of consensus earnings upgrades for Next PLC (LSE:NXT) and Inditex, after hosting a European consumer and retailing conference in London last week.
The broker came away thinking consumer trends were resilient, albeit with some shifts between categories, while the cost outlook had improved for both goods and operating expenses.
It was less optimistic on Primark owner Associated British Foods PLC (LSE:ABF), where it sees much less scope for upgrades.
On costs, RBC said raw material prices, including cotton, polyester and lumber, had fallen back following the Iran conflict ceasefire, easing pressure on fashion retailers.
That should mean industry-wide apparel inflation of 3% to 4% next spring, rather than the 8% feared a few months ago.
Freight rates were the main offset, having risen again as shippers frontload cargo ahead of peak season, pushing spot rates to their highest in 18 months.
UK labour costs were also seen abating, with this year's minimum wage rise of around 4% much closer to general wage growth than in recent years.
RBC singled out Currys, which reports full-year results on Thursday, as a beneficiary of fading cost headwinds.
The electricals retailer faced £32 million of statutory cost rises last year, largely from higher employer national insurance and the living wage, which should fall away.
If Currys hits its 3% operating margin target this year, that could drive an upgrade to consensus earnings of more than 15%.
Among other UK names, RBC raised its forecasts for Halfords following strong half-year results.
It lifted earnings estimates for the motoring and cycling group by around 10% for the 2027 and 2028 financial years, citing good trading across garages and retail stores.
The broker nudged its Halfords Group PLC (LSE:HFD) price target up to 210p from 165p, though it kept a sector perform rating.
On 3i Group PLC (LSE:III), RBC stuck with an underperform rating and 2,000p target, arguing the outlook for discount chain Action, its largest holding, looks tougher amid spending pressures in France and Germany.
