We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
It looks like Americans are gearing up to make this Halloween more special than any witnessed in past few years. Spending during this year’s Halloween is now expected to hit a record high, according to the National Retail Federation (NRF). This is backed by the recent improvements in the economy.
Retailers are set to benefit from this encouraging backdrop, without any doubt. Thus, selecting potential stocks from this space may prove to be a good investment proposition ahead of Halloween.
Halloween Spending Isn’t Scary Anymore
The NRF currently expects Americans to spend $8.4 billion or $82.93 per person for Halloween this year, significantly higher than the year-ago level of $74.34 a person. Shoppers are expected to spend about $3.1 billion on costumes, $2.5 billion on candy, $2.4 billion on decorations and $390 million on greeting cards.
Senior director of media relations at the NRF, Ana Serafin Smith, said, “I think consumers are a lot more comfortable with the state of the economy... People are willing to spend a little extra to have fun and feel good about the future.”
Treats All the Way
Along with Halloween, the NRF also expects this year’s holiday season to end with a blast. It expects holiday season sales, excluding autos, gas and restaurant sales, to be up 3.6% to $655.8 billion, with a 7%-10% surge in online sales to around $117 billion. If the total sales surge is as expected, then it will easily surpass the 10-year average pace of 2.5%. It will be also higher than last-year’s increase of 3.2%. Moreover, PricewaterhouseCoopers (PwC) forecasts that average spending this holiday season will surge 10% to $1,121 per person.
Matthew Shay, NRF President and CEO said: “All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season.” The economy is indeed gaining momentum lately, and everything from consumer confidence to retail sales signal this. While retail sales rose at the fastest pace in the last three months of 0.6% in September, Consumer Confidence Index rose to a nine-year high last month. Other economic data including last month’s ISM Manufacturing Index, ISM Services Index and industrial production were also encouraging.
4 Stocks to Buy
As mentioned earlier, retailers, who attract nearly one-third of the consumer spending, are the foremost gainers from this impressive Halloween and upcoming holiday sales outlook. Hence, investing in certain stocks from this domain looks to be a profitable investment option right now.
We have only chosen retail stocks which belong to the sub-categories that are expected to gain significantly from robust Halloween sales.
Online Retailers
Online retailers are expected to get a significantly large piece of the pie. Moreover, recently released economic data shows that demand for online products has increased significantly in the past few years.
Amazon.com, Inc. (AMZN - Free Report) , the biggest online retailer, is expected to be one of the biggest beneficiaries in online retail space. Gauging the favorable trends, this Zacks Rank #1 (Strong Buy) company has already announced that it will boost its seasonal workforce by 20% from the year-ago level to 120,000 in this holiday season.
Amazon has expected earnings growth rate of more than 100% for the current year compared with the industry average of 10.8%. Its earnings estimate for the current year has improved 1.6% over the last 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costume Retailers
Retailers, who are engaged in offering of costumes for Halloween, are also poised to significantly gain from the robust Halloween sales. As mentioned above, consumers will spend a significant amount of their money in buying Halloween costumes.
Among others, American Eagle Outfitters, Inc. (AEO - Free Report) , a specialty retailer of all-American casual apparel, accessories, and footwear, is well positioned to gain from Halloween sales. Its “The Halloween Shop” segment is meant to provide Halloween special apparels for both online and offline customers.
The company has a Zacks Rank #2 (Buy). It has an expected earnings growth rate of 20.5% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 13.44, lower than the industry average of 16.24.
Candy Manufacturers
"Trick-or-treating” requires neighbors to stock up on large amounts of candy, boosting demand during Halloween. The NRF indicates that spending on candy will also benefit candy manufacturers.
Apart from being one of the leading beverage companies in the world, Pepsico, Inc. (PEP - Free Report) is also a well-known name in the candy industry. According to Candy Industry, the company is among the top 50 candy producers throughout the world. This Zacks Rank #2 company has come up with plenty of new products for this Halloween.
Pepsico has an expected earnings growth rate of more than 5% for the current year. The P/E ratio for the current financial year (F1) is 22.00, lower than the industry average of 22.10. Its earnings estimate for the current year has improved 0.9% over the last 30 days.
Discount Stores
These are the ones where customers can buy Halloween-related products including costumes, candy, decorations and greeting cards under a single roof at fairly discounted prices. According to the NRF, out of the total Halloween customers, around 47% will go to these retailers for their purchases. Thus, discount stores are poised to gain from this encouraging environment.
Big Lots Inc. (BIG - Free Report) is one such name. It operates as an off-price apparel and home product retailer. This Zacks Rank #2 company has come up with a wide range of products for this Halloween. It also has an expected earnings growth rate of 18.9% for the current year, compared with the industry average of 9.5%. Its earnings estimate for the current year has improved 0.1% over the last 30 days. The P/E ratio for the current financial year (F1) is 12.66, lower than the industry average of 20.86.
Confidential from Zacks
This week, Zacks researchers have named 7 other stocks that look to break out even sooner than today's Bull of the Day. You can see these time-sensitive tickers free, and access additional trades that are not available to the public. Simply click here>>.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
4 Stocks to Light Up Your Halloween
It looks like Americans are gearing up to make this Halloween more special than any witnessed in past few years. Spending during this year’s Halloween is now expected to hit a record high, according to the National Retail Federation (NRF). This is backed by the recent improvements in the economy.
Retailers are set to benefit from this encouraging backdrop, without any doubt. Thus, selecting potential stocks from this space may prove to be a good investment proposition ahead of Halloween.
Halloween Spending Isn’t Scary Anymore
The NRF currently expects Americans to spend $8.4 billion or $82.93 per person for Halloween this year, significantly higher than the year-ago level of $74.34 a person. Shoppers are expected to spend about $3.1 billion on costumes, $2.5 billion on candy, $2.4 billion on decorations and $390 million on greeting cards.
Senior director of media relations at the NRF, Ana Serafin Smith, said, “I think consumers are a lot more comfortable with the state of the economy... People are willing to spend a little extra to have fun and feel good about the future.”
Treats All the Way
Along with Halloween, the NRF also expects this year’s holiday season to end with a blast. It expects holiday season sales, excluding autos, gas and restaurant sales, to be up 3.6% to $655.8 billion, with a 7%-10% surge in online sales to around $117 billion. If the total sales surge is as expected, then it will easily surpass the 10-year average pace of 2.5%. It will be also higher than last-year’s increase of 3.2%. Moreover, PricewaterhouseCoopers (PwC) forecasts that average spending this holiday season will surge 10% to $1,121 per person.
Matthew Shay, NRF President and CEO said: “All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season.” The economy is indeed gaining momentum lately, and everything from consumer confidence to retail sales signal this. While retail sales rose at the fastest pace in the last three months of 0.6% in September, Consumer Confidence Index rose to a nine-year high last month. Other economic data including last month’s ISM Manufacturing Index, ISM Services Index and industrial production were also encouraging.
4 Stocks to Buy
As mentioned earlier, retailers, who attract nearly one-third of the consumer spending, are the foremost gainers from this impressive Halloween and upcoming holiday sales outlook. Hence, investing in certain stocks from this domain looks to be a profitable investment option right now.
We have only chosen retail stocks which belong to the sub-categories that are expected to gain significantly from robust Halloween sales.
Online Retailers
Online retailers are expected to get a significantly large piece of the pie. Moreover, recently released economic data shows that demand for online products has increased significantly in the past few years.
Amazon.com, Inc. (AMZN - Free Report) , the biggest online retailer, is expected to be one of the biggest beneficiaries in online retail space. Gauging the favorable trends, this Zacks Rank #1 (Strong Buy) company has already announced that it will boost its seasonal workforce by 20% from the year-ago level to 120,000 in this holiday season.
Amazon has expected earnings growth rate of more than 100% for the current year compared with the industry average of 10.8%. Its earnings estimate for the current year has improved 1.6% over the last 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costume Retailers
Retailers, who are engaged in offering of costumes for Halloween, are also poised to significantly gain from the robust Halloween sales. As mentioned above, consumers will spend a significant amount of their money in buying Halloween costumes.
Among others, American Eagle Outfitters, Inc. (AEO - Free Report) , a specialty retailer of all-American casual apparel, accessories, and footwear, is well positioned to gain from Halloween sales. Its “The Halloween Shop” segment is meant to provide Halloween special apparels for both online and offline customers.
The company has a Zacks Rank #2 (Buy). It has an expected earnings growth rate of 20.5% for the current year. The forward price-to-earnings (P/E) ratio for the current financial year (F1) is 13.44, lower than the industry average of 16.24.
Candy Manufacturers
"Trick-or-treating” requires neighbors to stock up on large amounts of candy, boosting demand during Halloween. The NRF indicates that spending on candy will also benefit candy manufacturers.
Apart from being one of the leading beverage companies in the world, Pepsico, Inc. (PEP - Free Report) is also a well-known name in the candy industry. According to Candy Industry, the company is among the top 50 candy producers throughout the world. This Zacks Rank #2 company has come up with plenty of new products for this Halloween.
Pepsico has an expected earnings growth rate of more than 5% for the current year. The P/E ratio for the current financial year (F1) is 22.00, lower than the industry average of 22.10. Its earnings estimate for the current year has improved 0.9% over the last 30 days.
Discount Stores
These are the ones where customers can buy Halloween-related products including costumes, candy, decorations and greeting cards under a single roof at fairly discounted prices. According to the NRF, out of the total Halloween customers, around 47% will go to these retailers for their purchases. Thus, discount stores are poised to gain from this encouraging environment.
Big Lots Inc. (BIG - Free Report) is one such name. It operates as an off-price apparel and home product retailer. This Zacks Rank #2 company has come up with a wide range of products for this Halloween. It also has an expected earnings growth rate of 18.9% for the current year, compared with the industry average of 9.5%. Its earnings estimate for the current year has improved 0.1% over the last 30 days. The P/E ratio for the current financial year (F1) is 12.66, lower than the industry average of 20.86.
Confidential from Zacks
This week, Zacks researchers have named 7 other stocks that look to break out even sooner than today's Bull of the Day. You can see these time-sensitive tickers free, and access additional trades that are not available to the public. Simply click here>>.