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4 Solid Stocks to Buy as Retail Sales Continue to Soar
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The retail sector is fast getting back on track as the economy continues to reopen. The latest report from Mastercard SpendingPulse shows a solid jump in retail sales despite rising costs. One of the main reasons behind this is that people are a lot more confident now and have enough purchasing power owing to higher salaries.
This has seen people spend more on services as the economy continues to reopen following a sharp decline in new COVID-19 cases. However, e-commerce, which has been helping the retail sector, declined slightly, although it is still up from the pre-pandemic levels. Thus, stocks like Target Corporation (TGT - Free Report) , Nordstrom, Inc. (JWN - Free Report) , Costco Wholesale Corporation (COST - Free Report) and Tapestry, Inc. (TPR - Free Report) are likely to gain in the near term.
Retail Sales Jump
The retail sector continues to flourish lately amid challenges. According to the last Mastercard SpendingPulse report, retail sales excluding auto jumped 8.4% on a year-over-year basis in March. Moreover, it increased 18% from sales in the pre-pandemic period.
Several industries and businesses had almost come to a standstill during the peak of the pandemic but things are getting back to normal. March retail sales are proof that the economy is getting back to the normal operational level.
Airline travel surged 44.8% year over year in March, while restaurant sales and bookings at hotels rose 19.1%. This shows that spending on services is once again gaining pace, which is helping the retail sector.
However, that doesn’t mean it has impacted the sales of goods. Apparel and luxury goods sales increased 16% and 27.1%, respectively. Sales at departmental stores grew 14%. Also, in-store sales grew as people are more confident to step out of their homes. In-store sales grew 9.4% in March from the pre-pandemic levels.
Retail Sector Rebounding
The pandemic halted the operation of a large number of businesses. E-commerce played a key role during this time as millions shopped online. However, in-store traffic started rebounding from mid-2021, following the massive vaccination drive that gave people the due confidence to step out of their homes as businesses started getting operational.
Even then, two coronavirus variants — Delta and Omicron — saw cases surging during the mid and latter half of last year. This once again posed a threat for the economy and the retail sector continued to face obstacles. It also majorly affected the holiday season last year.
Things started changing with the turn of the year, as new cases of COVID-19 started declining and the death rate plunged. This allowed the economy to started functioning almost fully. Offices, businesses and schools started reopening and restrictions started getting lifted.
This saw spending on services once again surging. Also, in-store traffic that took a massive beating during the peak of the pandemic started rebounding.
Interestingly, the rise in retail sales in March came despite surging costs and worries of rising interest rates. It shows that people are willing to spend despite this as they have more purchasing power as they get back to office.
Personal income is also on the rise. Moreover, hiring is increasing and the unemployment level is at a record low. Thus, the retail sector is only going to benefit in the near term.
Our Choices
The retail sector is still facing a number of challenges but its growth hasn’t stagnated, which is a good sign. However, there are quite a few bright sports. Given this scenario, it would be ideal to invest in retail stocks. We have hand-picked four stocks for you. Each of the 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.
Target Corporation has evolved from being a pure brick & mortar retailer to an omni-channel entity. TGT has been investing 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’sacquisition of Shipt to provide same-day delivery of groceries, essentials, home, electronics as well as other products is worth noting.
Target Corporation’s expected earnings growth rate for the current year is 6.7%. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the past 60 days. TGT carries a Zacks Rank #2.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.
Tapestry reported stronger-than-expected first-quarter fiscal 2022 earnings, thanks to robust demand and strong customer engagement. TPR posted first-quarter adjusted earnings of 82 cents a share, beating the Zacks Consensus Estimate of 69 cents.
Tapestry’s expected earnings growth rate for the current year is 22.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 60 days. TPR has a Zacks Rank #2.
Nordstrom, Inc. is a leading fashion specialty retailer in the United States. JWN offers an extensive selection of both branded and private-label merchandise, which are positioned in the upscale segment of the industry. Nordstrom offers high-quality apparel, shoes, cosmetics and related accessories for men, women, young adults and children through a variety of channels.
Nordstrom’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 61.8% over the past 60 days. JWN sports a Zacks Rank #1.
Costco Wholesale Corporation sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. Costco is one of the largest warehouse club operators in the United States. COST also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.
Costco Wholesale Corporation’s expected earnings growth rate for the current year is 17.4%. The Zacks Consensus Estimate for current-year earnings improved 2.8% over the past 60 days. COST has a Zacks Rank #2.
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4 Solid Stocks to Buy as Retail Sales Continue to Soar
The retail sector is fast getting back on track as the economy continues to reopen. The latest report from Mastercard SpendingPulse shows a solid jump in retail sales despite rising costs. One of the main reasons behind this is that people are a lot more confident now and have enough purchasing power owing to higher salaries.
This has seen people spend more on services as the economy continues to reopen following a sharp decline in new COVID-19 cases. However, e-commerce, which has been helping the retail sector, declined slightly, although it is still up from the pre-pandemic levels. Thus, stocks like Target Corporation (TGT - Free Report) , Nordstrom, Inc. (JWN - Free Report) , Costco Wholesale Corporation (COST - Free Report) and Tapestry, Inc. (TPR - Free Report) are likely to gain in the near term.
Retail Sales Jump
The retail sector continues to flourish lately amid challenges. According to the last Mastercard SpendingPulse report, retail sales excluding auto jumped 8.4% on a year-over-year basis in March. Moreover, it increased 18% from sales in the pre-pandemic period.
Several industries and businesses had almost come to a standstill during the peak of the pandemic but things are getting back to normal. March retail sales are proof that the economy is getting back to the normal operational level.
Airline travel surged 44.8% year over year in March, while restaurant sales and bookings at hotels rose 19.1%. This shows that spending on services is once again gaining pace, which is helping the retail sector.
However, that doesn’t mean it has impacted the sales of goods. Apparel and luxury goods sales increased 16% and 27.1%, respectively. Sales at departmental stores grew 14%. Also, in-store sales grew as people are more confident to step out of their homes. In-store sales grew 9.4% in March from the pre-pandemic levels.
Retail Sector Rebounding
The pandemic halted the operation of a large number of businesses. E-commerce played a key role during this time as millions shopped online. However, in-store traffic started rebounding from mid-2021, following the massive vaccination drive that gave people the due confidence to step out of their homes as businesses started getting operational.
Even then, two coronavirus variants — Delta and Omicron — saw cases surging during the mid and latter half of last year. This once again posed a threat for the economy and the retail sector continued to face obstacles. It also majorly affected the holiday season last year.
Things started changing with the turn of the year, as new cases of COVID-19 started declining and the death rate plunged. This allowed the economy to started functioning almost fully. Offices, businesses and schools started reopening and restrictions started getting lifted.
This saw spending on services once again surging. Also, in-store traffic that took a massive beating during the peak of the pandemic started rebounding.
Interestingly, the rise in retail sales in March came despite surging costs and worries of rising interest rates. It shows that people are willing to spend despite this as they have more purchasing power as they get back to office.
Personal income is also on the rise. Moreover, hiring is increasing and the unemployment level is at a record low. Thus, the retail sector is only going to benefit in the near term.
Our Choices
The retail sector is still facing a number of challenges but its growth hasn’t stagnated, which is a good sign. However, there are quite a few bright sports. Given this scenario, it would be ideal to invest in retail stocks. We have hand-picked four stocks for you. Each of the 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.
Target Corporation has evolved from being a pure brick & mortar retailer to an omni-channel entity. TGT has been investing 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’sacquisition of Shipt to provide same-day delivery of groceries, essentials, home, electronics as well as other products is worth noting.
Target Corporation’s expected earnings growth rate for the current year is 6.7%. The Zacks Consensus Estimate for current-year earnings has improved 9.3% over the past 60 days. TGT carries a Zacks Rank #2.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.
Tapestry reported stronger-than-expected first-quarter fiscal 2022 earnings, thanks to robust demand and strong customer engagement. TPR posted first-quarter adjusted earnings of 82 cents a share, beating the Zacks Consensus Estimate of 69 cents.
Tapestry’s expected earnings growth rate for the current year is 22.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 60 days. TPR has a Zacks Rank #2.
Nordstrom, Inc. is a leading fashion specialty retailer in the United States. JWN offers an extensive selection of both branded and private-label merchandise, which are positioned in the upscale segment of the industry. Nordstrom offers high-quality apparel, shoes, cosmetics and related accessories for men, women, young adults and children through a variety of channels.
Nordstrom’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 61.8% over the past 60 days. JWN sports a Zacks Rank #1.
Costco Wholesale Corporation sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. Costco is one of the largest warehouse club operators in the United States. COST also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.
Costco Wholesale Corporation’s expected earnings growth rate for the current year is 17.4%. The Zacks Consensus Estimate for current-year earnings improved 2.8% over the past 60 days. COST has a Zacks Rank #2.