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4 Solid Stocks to Buy on Continued Rise in Retail Sales
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The retail sector has been showing resilience amid inflationary pressure as demand continues to remain high. This led to sales at U.S. retailers surging in August, the Commerce Department said on Aug 14.
Given this situation, investing in retail stocks like Ross Stores, Inc. (ROST - Free Report) , Walmart Inc. (WMT - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Urban Outfitters, Inc. (URBN - Free Report) will be a wise decision.
Retail Sales Jump in August
The Commerce Department said that retail sales totaled $697.6 billion in August, increasing 0.6% month over month and beating analysts’ expectations of a rise of 0.1%. This follows a 0.5% rise in retail sales in July.
On a year-over-year basis, retail sales jumped 2.5% in August. Total sales for the June through August 2023 period increased 2.2% year over year.
One of the major reasons behind the jump in August was sales at gas stations as fuel prices skyrocketed. However, even then consumers spent lavishly on apparel and eating out.
Clothing and accessories sales increased 0.9% in August while spending at gas stations jumped 5.2%.
Understandably, Americans are not hesitant about spending despite higher prices and inflationary pressure. That said, inflation has sharply declined over the past year and more than halved from its peak of 9.1% in June 2022.
The steady rise in retail sales also proves that the economy is on a strong footing. Given the sharp decline in inflation, optimism is also high about the Fed keeping its interest rates unchanged in its September FOMC, which begins on Sep 19. Lower interest rates definitely bode well for the retail sector.
Our Choices
Given the encouraging economic environment and an increase in retail sales, it would be a prudent move for savvy investors to consider betting on retail stocks that stand to benefit directly from these favorable conditions.
Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). Such stocks also have a VGM Score of A or B. Here, V stands for Value, G for Growth, and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States. ROST operates its stores under the Ross Dress for Less (Ross) and dd’s DISCOUNTS names. Ross Stores primarily offers in-season, branded and designer apparel, footwear, accessories, and other home-related merchandise for everyone in the family.
Ross Stores’ expected earnings growth rate for the current year is 19.4%. The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the past 60 days. ROST presently carries a Zacks Rank #2 and a VGM Score of A.
Walmart has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. WMT’s product offerings include almost everything from grocery to cosmetics, electronics to stationery, home furnishings to health and wellness products, and apparel to entertainment products, to name a few.
Walmart’s expected earnings growth rate for the current year is 8.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days. WMT presently carries a Zacks Rank #2 and a VGM Score of A
Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel for men, women, and kids through a network of approximately 850 stores across North America, Europe, Asia and the Middle East. ANF's product portfolio includes knit and woven shirts, graphic T-shirts, fleece, jeans and woven pants, shorts, sweaters, outerwear, personal care products and accessories for men, women and kids, under the Abercrombie & Fitch, abercrombie kids and Hollister brands.
Abercrombie & Fitch’s expected earnings growth rate for the current year is 1,644%. The Zacks Consensus Estimate for current-year earnings has improved 109.6% over the past 60 days. ANF currently sports a Zacks Rank #1 and has a VGM Score of A.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is 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 84.6%. The Zacks Consensus Estimate for current-year earnings has improved 17.5% over the past 60 days. URBN currently carries a Zacks Rank #2 and has a VGM Score of A.
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4 Solid Stocks to Buy on Continued Rise in Retail Sales
The retail sector has been showing resilience amid inflationary pressure as demand continues to remain high. This led to sales at U.S. retailers surging in August, the Commerce Department said on Aug 14.
Given this situation, investing in retail stocks like Ross Stores, Inc. (ROST - Free Report) , Walmart Inc. (WMT - Free Report) , Abercrombie & Fitch Co. (ANF - Free Report) and Urban Outfitters, Inc. (URBN - Free Report) will be a wise decision.
Retail Sales Jump in August
The Commerce Department said that retail sales totaled $697.6 billion in August, increasing 0.6% month over month and beating analysts’ expectations of a rise of 0.1%. This follows a 0.5% rise in retail sales in July.
On a year-over-year basis, retail sales jumped 2.5% in August. Total sales for the June through August 2023 period increased 2.2% year over year.
One of the major reasons behind the jump in August was sales at gas stations as fuel prices skyrocketed. However, even then consumers spent lavishly on apparel and eating out.
Clothing and accessories sales increased 0.9% in August while spending at gas stations jumped 5.2%.
Understandably, Americans are not hesitant about spending despite higher prices and inflationary pressure. That said, inflation has sharply declined over the past year and more than halved from its peak of 9.1% in June 2022.
The steady rise in retail sales also proves that the economy is on a strong footing. Given the sharp decline in inflation, optimism is also high about the Fed keeping its interest rates unchanged in its September FOMC, which begins on Sep 19. Lower interest rates definitely bode well for the retail sector.
Our Choices
Given the encouraging economic environment and an increase in retail sales, it would be a prudent move for savvy investors to consider betting on retail stocks that stand to benefit directly from these favorable conditions.
Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). Such stocks also have a VGM Score of A or B. Here, V stands for Value, G for Growth, and M for Momentum. The score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States. ROST operates its stores under the Ross Dress for Less (Ross) and dd’s DISCOUNTS names. Ross Stores primarily offers in-season, branded and designer apparel, footwear, accessories, and other home-related merchandise for everyone in the family.
Ross Stores’ expected earnings growth rate for the current year is 19.4%. The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the past 60 days. ROST presently carries a Zacks Rank #2 and a VGM Score of A.
Walmart has evolved from just being a traditional brick-and-mortar retailer into an omnichannel player. WMT’s product offerings include almost everything from grocery to cosmetics, electronics to stationery, home furnishings to health and wellness products, and apparel to entertainment products, to name a few.
Walmart’s expected earnings growth rate for the current year is 8.9%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days. WMT presently carries a Zacks Rank #2 and a VGM Score of A
Abercrombie & Fitch operates as a specialty retailer of premium, high-quality casual apparel for men, women, and kids through a network of approximately 850 stores across North America, Europe, Asia and the Middle East. ANF's product portfolio includes knit and woven shirts, graphic T-shirts, fleece, jeans and woven pants, shorts, sweaters, outerwear, personal care products and accessories for men, women and kids, under the Abercrombie & Fitch, abercrombie kids and Hollister brands.
Abercrombie & Fitch’s expected earnings growth rate for the current year is 1,644%. The Zacks Consensus Estimate for current-year earnings has improved 109.6% over the past 60 days. ANF currently sports a Zacks Rank #1 and has a VGM Score of A.
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is 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 84.6%. The Zacks Consensus Estimate for current-year earnings has improved 17.5% over the past 60 days. URBN currently carries a Zacks Rank #2 and has a VGM Score of A.