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4 Retail Stocks to Buy Despite Rising Commodity Prices
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High commodity prices have slowed retail sales. However, the sector is growing as consumers cautiously continue to spend on essentials. In fact, the sector has managed to put up a decent show even during the prevailing trying times, as demand for goods is still high.
According to the latest Mastercard SpendingPulse, retail sales grew year over year in March. E-commerce once again played a major role in boosting sales. Given this situation, stocks like Casey's General Stores, Inc. (CASY - Free Report) ,Urban Outfitters, Inc. (URBN - Free Report) , DICK'S Sporting Goods, Inc. (DKS - Free Report) and Ulta Beauty, Inc. (ULTA - Free Report) with a solid online presence are likely to benefit in the near term.
Retail Sales Defy Rising Prices
The retail sector has been badly hit by rising commodity prices as the Fed continues to raise interest rates at an aggressive pace to tame soaring inflation. However, sales have still been growing at a steady pace, which is a good sign for the sector.
According to the latest Mastercard SpendingPulse, retail sales in the United States rose 4.7% year over year in March. Nominal spending was marginally lower than in February, but spending trends were almost in line with what was seen earlier this year, according to the report.
Online sales grew a solid 13% in March on a year-over-year basis. In-store sales also put up a good show, increasing 2.8%. Sales at restaurants climbed 11.6% in March. Grocery sales jumped 5.6%.
E-commerce has been the mainstay of the retail sector since the COVID-19 outbreak. Online sales have been contributing to the majority of overall retail sales, although brick-and-mortar stores are trying to regain their lost territory.
The pandemic gave e-commerce a major push as millions stayed at home and shopped online, including ordering food, on concerns over contracting the deadly virus. The trend has since continued as consumers have realized the convenience of shopping online.
Another factor contributing to the consistent growth in retail sales is increased spending, which is being driven by solid job additions to the economy. The Labor Department reported that nonfarm payrolls increased an impressive 236,000 in March.
The labor market has been resilient despite rising inflationary pressures, which is allowing people to spend more freely because more jobs mean more wages.
Our Choices
This is, thus, the right opportunity to invest in retail stocks that have a strong online presence.
Casey's General Stores, Inc. operates convenience stores under the Casey's and Casey's General Store names in 16 Midwestern states, mainly Iowa, Missouri and Illinois. CASY also operates two stores under the name "Tobacco City," selling primarily tobacco and nicotine products, one liquor store and one grocery store.
Casey's General Stores’ expected earnings growth rate for the current year is 28.1%. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the past 60 days. CASY currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Urban Outfitters, Inc. is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gifts products. URBN merchandises are generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for the current year is 41.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. URBN currently sports a Zacks Rank #1.
DICK'S Sporting Goods, Inc. operates as a major omni-channel 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 12.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. DKS currently carries a Zacks Rank #2.
Ulta Beauty, Inc. is a leading beauty retailer in the United States. ULTA offers a wide range of products, including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools in stores. Ulta Beauty sells more than 25,000 products from about 500 well-established and emerging beauty brands across all categories and price points.
Ulta Beauty’s expected earnings growth rate for the current year is 5.1%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days. ULTA currently carries a Zacks Rank #2.
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4 Retail Stocks to Buy Despite Rising Commodity Prices
High commodity prices have slowed retail sales. However, the sector is growing as consumers cautiously continue to spend on essentials. In fact, the sector has managed to put up a decent show even during the prevailing trying times, as demand for goods is still high.
According to the latest Mastercard SpendingPulse, retail sales grew year over year in March. E-commerce once again played a major role in boosting sales. Given this situation, stocks like Casey's General Stores, Inc. (CASY - Free Report) ,Urban Outfitters, Inc. (URBN - Free Report) , DICK'S Sporting Goods, Inc. (DKS - Free Report) and Ulta Beauty, Inc. (ULTA - Free Report) with a solid online presence are likely to benefit in the near term.
Retail Sales Defy Rising Prices
The retail sector has been badly hit by rising commodity prices as the Fed continues to raise interest rates at an aggressive pace to tame soaring inflation. However, sales have still been growing at a steady pace, which is a good sign for the sector.
According to the latest Mastercard SpendingPulse, retail sales in the United States rose 4.7% year over year in March. Nominal spending was marginally lower than in February, but spending trends were almost in line with what was seen earlier this year, according to the report.
Online sales grew a solid 13% in March on a year-over-year basis. In-store sales also put up a good show, increasing 2.8%. Sales at restaurants climbed 11.6% in March. Grocery sales jumped 5.6%.
E-commerce has been the mainstay of the retail sector since the COVID-19 outbreak. Online sales have been contributing to the majority of overall retail sales, although brick-and-mortar stores are trying to regain their lost territory.
The pandemic gave e-commerce a major push as millions stayed at home and shopped online, including ordering food, on concerns over contracting the deadly virus. The trend has since continued as consumers have realized the convenience of shopping online.
Another factor contributing to the consistent growth in retail sales is increased spending, which is being driven by solid job additions to the economy. The Labor Department reported that nonfarm payrolls increased an impressive 236,000 in March.
The labor market has been resilient despite rising inflationary pressures, which is allowing people to spend more freely because more jobs mean more wages.
Our Choices
This is, thus, the right opportunity to invest in retail stocks that have a strong online presence.
Casey's General Stores, Inc. operates convenience stores under the Casey's and Casey's General Store names in 16 Midwestern states, mainly Iowa, Missouri and Illinois. CASY also operates two stores under the name "Tobacco City," selling primarily tobacco and nicotine products, one liquor store and one grocery store.
Casey's General Stores’ expected earnings growth rate for the current year is 28.1%. The Zacks Consensus Estimate for current-year earnings has improved 5.1% over the past 60 days. CASY currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Urban Outfitters, Inc. is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gifts products. URBN merchandises are generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for the current year is 41.7%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. URBN currently sports a Zacks Rank #1.
DICK'S Sporting Goods, Inc. operates as a major omni-channel 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 12.1%. The Zacks Consensus Estimate for current-year earnings has improved 12.8% over the past 60 days. DKS currently carries a Zacks Rank #2.
Ulta Beauty, Inc. is a leading beauty retailer in the United States. ULTA offers a wide range of products, including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools in stores. Ulta Beauty sells more than 25,000 products from about 500 well-established and emerging beauty brands across all categories and price points.
Ulta Beauty’s expected earnings growth rate for the current year is 5.1%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days. ULTA currently carries a Zacks Rank #2.