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Retail Stocks with Big Growth Plans

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  • (0:30) - Retailers With Room To Expand
  • (3:40) - Lululemons Growth and Success 
  • (7:15) - Gap's Expanded Athleisure Line: AlthetaHill City
  • (12:35) - At Home: Home Decor Products 
  • (15:00) - 5 Below & Ollie’s Bargain Outlet 
  • (21:45) - Grocery Retail: Aldi & Whole Foods 
  • (28:45) - Episode Roundup: FIVE, LULU, GPS, OLLI, HOME
  •                 Podcast@Zacks.com

Welcome to Episode #157 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks Editor Maddy Johnson to discuss what’s going on in the retail industry.

Who’s Winning in Retail?

Every year, the two discuss the ins and outs of the retail industry during the all-important holiday season.

Black Friday and Cyber Monday were successes in 2018 as shoppers turned out in force to nab the deals. Apparel is a big item this year which is the first time Americans have set out to buy new clothes during the holiday season in years.

But this year for the podcast, they wanted to focus on retailers that aren’t in every mall across America. It can often take decades for a retailer to expand across just the United States, not to mention internationally.

Who are the retailers with the big growth plans that investors should know about?

5 Retailers with Big Expansion Plans

1.       Lululemon (LULU - Free Report) has only just begun to tap its possible market. The maker of men’s and women’s athleisure clothes and accessories continues to build out its stores across the United States and internationally. Its men’s business is hot and a growing source of revenue. With a P/E of 39, it’s back to trading as a growth stock.

2.       Gap (GPS - Free Report) has been around for decades so what is it doing in this podcast? It’s athleisure chain, Athleta, continues to expand as it adds stores across the United States. Additionally, it recently launched a men’s segment called Hill City to tap that lucrative market. Because of weakness in its other, larger, brands, Gap trades with a forward P/E of just 10.9.

3.       Five Below, Inc. (FIVE - Free Report) has been one of the hottest retailers in 2018 as shares are up over 50% year-to-date. This value concept store for kids and teens has expanded to 725 stores in 33 states. That leaves it plenty of room for further expansion. It’s not cheap, with a forward P/E of 42, but you’re buying the growth.

4.       At Home Group has 150 stores in 30 states and specializes in home accessory products. This retail segment has been hot as Americans have been spending on their homes during the last few years. Shares are down 13% year-to-date and trade with a forward P/E of 22. It’s reporting earnings this week.

5.       Ollie’s Bargain Outlet Holdings, Inc. (OLLI - Free Report) has been one of this year’s best performing retailers. Shares are up 66% year-to-date but unless you live on the east coast, you probably have never heard of them. It now has 300 stores, however, and continues to expand. But it’s no bargain stock as it trades with a forward P/E of 51. Is the growth worth the price?

What other retailers are in expansion, and not contraction, mode?

Find out all about the retailers on a growth streak on this week’s podcast.

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