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Forget Inflation, Retail Sales Stage a Solid Rebound: 5 Winners
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The U.S. retail sector is staging a remarkable comeback as sales increased in March, which is evidence that the economy is on solid ground and that the first quarter saw an impressive end. Higher personal income and consumer spending have been boosting retail sales.
The Commerce Department reported on Apr 15 that retail sales totaled $709.6 billion, increasing 0.7% month over month in March and surpassing the consensus estimate of a rise of 0.3%.
Year over year, retail sales increased 4% in March. Total sales for January through March increased 2.1% from the year-ago period. Excluding auto, retail sales increased 1.1%, also beating estimates of a rise of 0.5%.
The jump in March can be attributed to solid online sales, which jumped 2.7% month over month.
Although inflation continued to take its toll and higher borrowing costs posed a challenge, consumers spent lavishly. The consumer price index increased 0.4% in March. However, a resilient labor market has been helping consumers spend more.
Total job additions in the first quarter averaged 276,000, a lot higher than the fourth-quarter 2023 average of 212,000.
Also, a solid rise in consumer spending is helping the economy. Consumer spending accounts for 70% of the overall economic output.
Retail sales are likely to further excel once the Federal Reserve starts interest rate cuts, which will lower borrowing costs and give more purchasing power to consumers.
Our Picks
Given the encouraging economic environment and increase in retail sales, it would be prudent for savvy investors to consider betting on retail stocks like American Eagle Outfitters, Inc. (AEO - Free Report) , DICK'S Sporting Goods, Inc. (DKS - Free Report) , eBay Inc. (EBAY - Free Report) , Target Corporation (TGT - Free Report) and Tripadvisor, Inc. (TRIP - Free Report) . Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters, Inc. is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. AEO, along with its subsidiaries, engages in the designing and marketing of casual clothing. American Eagle Outfitters’ assortment includes jeans, cargo pants, graphic T-shirts, as well as a range of accessories, outerwear and footwear.
American Eagle Outfitters’ expected earnings growth rate for the current year is 12.5%. The Zacks Consensus Estimate for current-year earnings has improved 13.2% over the past 60 days. AEO presently sports a Zacks Rank #1.
DICK'S Sporting Goods, Inc. operates as a major omnichannel sporting goods retailer, offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf and water sports, among others. DKS offers these items through a blend of associates, in-store services and unique specialty shop-in-shops.
DICK'S Sporting Goods’ expected earnings growth rate for the current year is 2.9%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. DKS currently carries a Zacks Rank #2.
eBay Inc. operates an online shopping platform that provides sellers the tools to build online store formats, making it easier for customers to browse by brands. Over the years, EBAY has evolved from a relatively small community user-based auction site to a worldwide commercial behemoth store.
eBay has an expected earnings growth rate of 9.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5% over the past 60 days. EBAY presently carries a Zacks Rank #2.
Target Corporation has evolved from just being a pure brick & mortar retailer to an omni-channel entity. TGT has been making investments in technologies, improving websites and mobile apps and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players. Target Corporation provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids.
Target Corporation’s expected earnings growth rate for the current year is 5%. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. TGT has a Zacks Rank #2.
Tripadvisor, Inc. is one of the largest online travel research companies in the world. TRIP provides a platform for users to share reviews, ratings and opinions on hotels, destinations, attractions and restaurants. Tripadvisor also facilitates bookings between hotel suppliers and consumers using its web portals.
Tripadvisor’s expected earnings growth rate for the current year is 20.9%. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the past 60 days. TRIP currently has a Zacks Rank #2.
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Forget Inflation, Retail Sales Stage a Solid Rebound: 5 Winners
The U.S. retail sector is staging a remarkable comeback as sales increased in March, which is evidence that the economy is on solid ground and that the first quarter saw an impressive end. Higher personal income and consumer spending have been boosting retail sales.
The Commerce Department reported on Apr 15 that retail sales totaled $709.6 billion, increasing 0.7% month over month in March and surpassing the consensus estimate of a rise of 0.3%.
Year over year, retail sales increased 4% in March. Total sales for January through March increased 2.1% from the year-ago period. Excluding auto, retail sales increased 1.1%, also beating estimates of a rise of 0.5%.
The jump in March can be attributed to solid online sales, which jumped 2.7% month over month.
Although inflation continued to take its toll and higher borrowing costs posed a challenge, consumers spent lavishly. The consumer price index increased 0.4% in March. However, a resilient labor market has been helping consumers spend more.
Total job additions in the first quarter averaged 276,000, a lot higher than the fourth-quarter 2023 average of 212,000.
Also, a solid rise in consumer spending is helping the economy. Consumer spending accounts for 70% of the overall economic output.
Retail sales are likely to further excel once the Federal Reserve starts interest rate cuts, which will lower borrowing costs and give more purchasing power to consumers.
Our Picks
Given the encouraging economic environment and increase in retail sales, it would be prudent for savvy investors to consider betting on retail stocks like American Eagle Outfitters, Inc. (AEO - Free Report) , DICK'S Sporting Goods, Inc. (DKS - Free Report) , eBay Inc. (EBAY - Free Report) , Target Corporation (TGT - Free Report) and Tripadvisor, Inc. (TRIP - Free Report) . Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Eagle Outfitters, Inc. is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. AEO, along with its subsidiaries, engages in the designing and marketing of casual clothing. American Eagle Outfitters’ assortment includes jeans, cargo pants, graphic T-shirts, as well as a range of accessories, outerwear and footwear.
American Eagle Outfitters’ expected earnings growth rate for the current year is 12.5%. The Zacks Consensus Estimate for current-year earnings has improved 13.2% over the past 60 days. AEO presently sports a Zacks Rank #1.
DICK'S Sporting Goods, Inc. operates as a major omnichannel sporting goods retailer, offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf and water sports, among others. DKS offers these items through a blend of associates, in-store services and unique specialty shop-in-shops.
DICK'S Sporting Goods’ expected earnings growth rate for the current year is 2.9%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. DKS currently carries a Zacks Rank #2.
eBay Inc. operates an online shopping platform that provides sellers the tools to build online store formats, making it easier for customers to browse by brands. Over the years, EBAY has evolved from a relatively small community user-based auction site to a worldwide commercial behemoth store.
eBay has an expected earnings growth rate of 9.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5% over the past 60 days. EBAY presently carries a Zacks Rank #2.
Target Corporation has evolved from just being a pure brick & mortar retailer to an omni-channel entity. TGT has been making investments in technologies, improving websites and mobile apps and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players. Target Corporation provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids.
Target Corporation’s expected earnings growth rate for the current year is 5%. The Zacks Consensus Estimate for current-year earnings has improved 2.7% over the past 60 days. TGT has a Zacks Rank #2.
Tripadvisor, Inc. is one of the largest online travel research companies in the world. TRIP provides a platform for users to share reviews, ratings and opinions on hotels, destinations, attractions and restaurants. Tripadvisor also facilitates bookings between hotel suppliers and consumers using its web portals.
Tripadvisor’s expected earnings growth rate for the current year is 20.9%. The Zacks Consensus Estimate for current-year earnings has improved 9.1% over the past 60 days. TRIP currently has a Zacks Rank #2.