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Last week, the BEA released personal income and expenditure numbers for the month of April. Although it looks like income is declining (real disposable personal income or DPI dropped 15.1% in April) and expenditures are moving in the same direction (real personal consumption expenditures, or PCE dropped 0.1%, with the goods component dropping 1.3% and the services component increasing 0.6%), this is not a negative situation. And that is evident from the release itself.
First of all, the decline in real income appears to be coming from a scale-down in the American Rescue Plan Act of 2021 (relative to March 2021), as well as decreases in payments from the Pandemic Unemployment Compensation program (again, relative to March). Some states are disincentivizing people from staying home by refusing unemployment benefits.
So, the government is nudging people who can’t work from home to get back on the job. This was always a possibility to get the economy back on its feet.
Second, the personal savings rate for April was 14.9%. Although down significantly from the 2020 highs, this is higher than it’s ever been before that, going back up to 1960. So it’s obvious that people are still preferring to save rather than spend.
And a look at the PCE details tells us a little bit more about what they’re doing. So when we’re saying that spending on goods went down, it’s worth noting that the decline was broad-based in the non-durable category, and led by food and beverages.
Also, durable goods expenditures actually increased, as people increased spending on motor vehicles and parts. On the services side, the increase came from recreation services, food and accommodation.
So basically, people are saying that they’ve had just about enough of staying home, and especially cooking at home. They’re more than willing to go out when they can to eat, travel and have a bit of fun. While some may be worrying about the inflation, the numbers indicate that people feel they have the cash to let the hair down.
The Conference Board’s Consumer Confidence Index for May is 117.2, down marginally from 117.5 in April. Survey results indicate that consumers are highly optimistic about the present situation and believe that the good times wont last indefinitely (naturally, since everyone expects the government payouts to stop soon). And the expectations index, which fell from 107.9 last month to 99.1 this month can hardly be considered disappointing.
All this is, of course, good news for retail, restaurants, apparel/shoes, fitness, recreation, beauty, etc industries. So here are a few great stocks from these hot segments that are worth picking up today-
New York-based Foot Locker is a retailer of athletic shoes and apparel. The company operates websites and mobile apps, aligned with store brand names: footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, footlocker.com.au, runnerspoint.com, sidestep-shoes.com, footlocker.hk, footlocker.sg, and footlocker.my.
As of Jan 30, 2021, the company operated 2,998 stores across 28 countries in North America, Europe, Asia, Australia and New Zealand. It also has 127 franchised Foot Locker stores in the Middle East.
It’s a member of the Retail - Apparel and Shoes industry, which is in the top 17% of Zacks-classified industries.
The Zacks Rank #1 (Strong Buy) company with Value and Growth Scores of A and Momentum Score of B topped first quarter estimates by 71.9%. Current expectations for its 2022 (ending January) revenue and earnings growth are pegged at 11.2% and 89.0%, respectively.
Growth is expected to normalize in the following year to 1.6% for revenue and 3.2% for earnings. The estimate revision trend is also encouraging: 2022 earnings estimate up 14.7% and 2023 earnings estimate up 8.7% in the last 30 days.
The Nashville-based specialty retailer sells footwear, headwear and accessories in retail stores across the United States and Canada and online. Its popular brand names are Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection. It also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand.
This is another member of the Retail - Apparel and Shoes industry, which has returned 27.7% to investors year to date.
The Zacks Rank #1 company has a Value Score of B and Growth and Momentum Scores of A. Since beating the Zacks Consensus Estimate by 238.6% in its fiscal first quarter ending April, the company has seen slight upward revision in estimates. Current expectations call for revenue and earnings growth of 18.6% and 413.6% this year followed by 4.3% and 31.1% in the following year.
MarineMax is the nation's largest recreational boat and yacht retailer. Focused on premium brands, such as Sea Ray, Boston Whaler, Meridian, Hatteras, Azimut Yachts, Ocean Alexander, Galeon, Grady-White, Harris, Crest, Scout, Sailfish, Sea Pro, Scarab Jet Boats, Aquila and Nautique, MarineMax sells new and used recreational boats and related marine products and services, and provides yacht brokerage and charter services. MarineMax currently has 62 retail locations across 17 U.S. states and operates MarineMax Vacations in Tortola, British Virgin Islands.
A member of the Retail – Miscellaneous industry (top 19%), MarineMax has a Zacks Rank #1, Value and Growth Scores of A and Momentum Score of C. In the March quarter, it topped the Zacks Consensus Estimate for earnings by 131.5%, sending its 2021 (ending September) estimate up 26.9%. the 2022 estimate was also revised upward by 26.3%. The company is currently expected to grow revenue by 33.9% and 2.4%, respectively in 2021 and 2022. Its earnings are expected to jump 60.2% and 4.3% in the said years.
Bolingbrook, IL-based, Ulta is a leading beauty retailer of 25,000+ products including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools from about 500 well-established and emerging beauty brands across all categories and price points. Its private label products are Ulta Beauty Collection branded cosmetics, skincare and bath products.
At the end of Q1, it had 1,290 stores, expecting to add another 40 and remodel 19 this year. Each of these stores also have a full-service salon with offering hair, skin and brow services. It also sells through its apps and website ulta.com. The company has a strong vendor base including the likes of Estee Lauder, L’Oréal and Shiseido. Its skincare category has been doing particularly well of late, with growing consciousness among consumers.
Zacks #1 ranked Ulta is also a member of the Retail – Miscellaneous industry. It has a Value Score of D but Growth and Momentum Scores of A. The company topped estimates by 113.5% in the first fiscal quarter ending April.
The Zacks Consensus Estimate for fiscal years 2022 and 2023 are up 31 cents (3.2%) and 16 cents (1.3%), respectively. Revenue and earnings for the current year are currently expected to grow 18.0% and 112.7%, respectively. For the next year, they’re expected to be up 17.2% and 21.9%, respectively.
Headquartered in Denton, TX, Sally Beauty is among the largest distributors of beauty products in the United States Puerto Rico, the U.K., Chile, Belgium, Canada, Mexico, Spain, Germany, France, Ireland, the Netherlands, and Peru. Through its 5,061+ stores, it sells a wide range of products including hair color and care products, styling tools, skin and nail care products and other beauty items at various price points.
Another member of the Retail – Miscellaneous industry, Sally Beauty has a Zacks Rank #1, Value Score A, Growth Score D and Momentum Score C. The company beat The Zacks Consensus Estimate for the March quarter by 307.1%. Since then, its fiscal 2021 (ending September) estimate is up 30%.
The estimate for 2022 is up 19.7%. Expected revenue and earnings growth for 2021 is a respective 7.4% and 81.2%. For 2022, growth is expected to be 2.4% and 4.9%, respectively.
Ruth’s Hospitality Group, Inc.
Headquartered in Winter Park, FL, Ruth's is the largest fine dining steakhouse company in the U.S. as measured by the total number of company-owned and franchisee-owned restaurants. It has over 150 Ruth's Chris Steak House locations worldwide specializing in USDA Prime grade steaks.
Ruth's belongs to the Retail – Restaurants industry, which is in the top 35% of Zacks-classified industries. The Zacks Rank #1 company with a Value Score of D and Growth and Momentum Scores of B topped the March quarter estimate by 160.0%.
Thereafter, its 2021 estimate jumped 63.8% while the estimate for 2022 jumped 40.0%. Its revenue and earnings are expected to increase a respective 47.7% and 350.0% this year and a respective 13.6% and 40.4% next year.
One-Month Price Movement
Image Source: Zacks Investment Research
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
6 Retail Stocks To Play the Reopening
Last week, the BEA released personal income and expenditure numbers for the month of April. Although it looks like income is declining (real disposable personal income or DPI dropped 15.1% in April) and expenditures are moving in the same direction (real personal consumption expenditures, or PCE dropped 0.1%, with the goods component dropping 1.3% and the services component increasing 0.6%), this is not a negative situation. And that is evident from the release itself.
First of all, the decline in real income appears to be coming from a scale-down in the American Rescue Plan Act of 2021 (relative to March 2021), as well as decreases in payments from the Pandemic Unemployment Compensation program (again, relative to March). Some states are disincentivizing people from staying home by refusing unemployment benefits.
So, the government is nudging people who can’t work from home to get back on the job. This was always a possibility to get the economy back on its feet.
Second, the personal savings rate for April was 14.9%. Although down significantly from the 2020 highs, this is higher than it’s ever been before that, going back up to 1960. So it’s obvious that people are still preferring to save rather than spend.
And a look at the PCE details tells us a little bit more about what they’re doing. So when we’re saying that spending on goods went down, it’s worth noting that the decline was broad-based in the non-durable category, and led by food and beverages.
Also, durable goods expenditures actually increased, as people increased spending on motor vehicles and parts. On the services side, the increase came from recreation services, food and accommodation.
So basically, people are saying that they’ve had just about enough of staying home, and especially cooking at home. They’re more than willing to go out when they can to eat, travel and have a bit of fun. While some may be worrying about the inflation, the numbers indicate that people feel they have the cash to let the hair down.
The Conference Board’s Consumer Confidence Index for May is 117.2, down marginally from 117.5 in April. Survey results indicate that consumers are highly optimistic about the present situation and believe that the good times wont last indefinitely (naturally, since everyone expects the government payouts to stop soon). And the expectations index, which fell from 107.9 last month to 99.1 this month can hardly be considered disappointing.
All this is, of course, good news for retail, restaurants, apparel/shoes, fitness, recreation, beauty, etc industries. So here are a few great stocks from these hot segments that are worth picking up today-
Foot Locker, Inc. (FL - Free Report)
New York-based Foot Locker is a retailer of athletic shoes and apparel. The company operates websites and mobile apps, aligned with store brand names: footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, footlocker.com.au, runnerspoint.com, sidestep-shoes.com, footlocker.hk, footlocker.sg, and footlocker.my.
As of Jan 30, 2021, the company operated 2,998 stores across 28 countries in North America, Europe, Asia, Australia and New Zealand. It also has 127 franchised Foot Locker stores in the Middle East.
It’s a member of the Retail - Apparel and Shoes industry, which is in the top 17% of Zacks-classified industries.
The Zacks Rank #1 (Strong Buy) company with Value and Growth Scores of A and Momentum Score of B topped first quarter estimates by 71.9%. Current expectations for its 2022 (ending January) revenue and earnings growth are pegged at 11.2% and 89.0%, respectively.
Growth is expected to normalize in the following year to 1.6% for revenue and 3.2% for earnings. The estimate revision trend is also encouraging: 2022 earnings estimate up 14.7% and 2023 earnings estimate up 8.7% in the last 30 days.
Genesco Inc. (GCO - Free Report)
The Nashville-based specialty retailer sells footwear, headwear and accessories in retail stores across the United States and Canada and online. Its popular brand names are Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection. It also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand.
This is another member of the Retail - Apparel and Shoes industry, which has returned 27.7% to investors year to date.
The Zacks Rank #1 company has a Value Score of B and Growth and Momentum Scores of A. Since beating the Zacks Consensus Estimate by 238.6% in its fiscal first quarter ending April, the company has seen slight upward revision in estimates. Current expectations call for revenue and earnings growth of 18.6% and 413.6% this year followed by 4.3% and 31.1% in the following year.
MarineMax, Inc. (HZO - Free Report)
MarineMax is the nation's largest recreational boat and yacht retailer. Focused on premium brands, such as Sea Ray, Boston Whaler, Meridian, Hatteras, Azimut Yachts, Ocean Alexander, Galeon, Grady-White, Harris, Crest, Scout, Sailfish, Sea Pro, Scarab Jet Boats, Aquila and Nautique, MarineMax sells new and used recreational boats and related marine products and services, and provides yacht brokerage and charter services. MarineMax currently has 62 retail locations across 17 U.S. states and operates MarineMax Vacations in Tortola, British Virgin Islands.
A member of the Retail – Miscellaneous industry (top 19%), MarineMax has a Zacks Rank #1, Value and Growth Scores of A and Momentum Score of C. In the March quarter, it topped the Zacks Consensus Estimate for earnings by 131.5%, sending its 2021 (ending September) estimate up 26.9%. the 2022 estimate was also revised upward by 26.3%. The company is currently expected to grow revenue by 33.9% and 2.4%, respectively in 2021 and 2022. Its earnings are expected to jump 60.2% and 4.3% in the said years.
Ulta Beauty Inc. (ULTA - Free Report)
Bolingbrook, IL-based, Ulta is a leading beauty retailer of 25,000+ products including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools from about 500 well-established and emerging beauty brands across all categories and price points. Its private label products are Ulta Beauty Collection branded cosmetics, skincare and bath products.
At the end of Q1, it had 1,290 stores, expecting to add another 40 and remodel 19 this year. Each of these stores also have a full-service salon with offering hair, skin and brow services. It also sells through its apps and website ulta.com. The company has a strong vendor base including the likes of Estee Lauder, L’Oréal and Shiseido. Its skincare category has been doing particularly well of late, with growing consciousness among consumers.
Zacks #1 ranked Ulta is also a member of the Retail – Miscellaneous industry. It has a Value Score of D but Growth and Momentum Scores of A. The company topped estimates by 113.5% in the first fiscal quarter ending April.
The Zacks Consensus Estimate for fiscal years 2022 and 2023 are up 31 cents (3.2%) and 16 cents (1.3%), respectively. Revenue and earnings for the current year are currently expected to grow 18.0% and 112.7%, respectively. For the next year, they’re expected to be up 17.2% and 21.9%, respectively.
Sally Beauty Holdings, Inc. (SBH - Free Report)
Headquartered in Denton, TX, Sally Beauty is among the largest distributors of beauty products in the United States Puerto Rico, the U.K., Chile, Belgium, Canada, Mexico, Spain, Germany, France, Ireland, the Netherlands, and Peru. Through its 5,061+ stores, it sells a wide range of products including hair color and care products, styling tools, skin and nail care products and other beauty items at various price points.
Another member of the Retail – Miscellaneous industry, Sally Beauty has a Zacks Rank #1, Value Score A, Growth Score D and Momentum Score C. The company beat The Zacks Consensus Estimate for the March quarter by 307.1%. Since then, its fiscal 2021 (ending September) estimate is up 30%.
The estimate for 2022 is up 19.7%. Expected revenue and earnings growth for 2021 is a respective 7.4% and 81.2%. For 2022, growth is expected to be 2.4% and 4.9%, respectively.
Ruth’s Hospitality Group, Inc.
Headquartered in Winter Park, FL, Ruth's is the largest fine dining steakhouse company in the U.S. as measured by the total number of company-owned and franchisee-owned restaurants. It has over 150 Ruth's Chris Steak House locations worldwide specializing in USDA Prime grade steaks.
Ruth's belongs to the Retail – Restaurants industry, which is in the top 35% of Zacks-classified industries. The Zacks Rank #1 company with a Value Score of D and Growth and Momentum Scores of B topped the March quarter estimate by 160.0%.
Thereafter, its 2021 estimate jumped 63.8% while the estimate for 2022 jumped 40.0%. Its revenue and earnings are expected to increase a respective 47.7% and 350.0% this year and a respective 13.6% and 40.4% next year.
One-Month Price Movement
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>