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.
With the onset of November, the U.S. economy has entered into the festive season. Recently, reported several economic data have shown that the fundamentals of the economy remain rock solid despite the Fed kept the benchmark lending rate at 22 years high.
The U.S. economy grew at an astonishing 4.9% in third-quarter 2023. Personal expenditure climbed to 0.7% month over month in September despite dwindling personal income and savings rate. Retail sales also jumped 0.7% in September, surpassing the consensus mark of 0.3%.
Consequently, holiday retail sales are likely to remain strong this year. Mastercard SpendingPulse estimated holiday retail sales (excluding automotive) between Nov 1 and Dec 24, to increase 3.7% year over year. E-commerce and online sales are likely to grow 6.7% and 2.9%, respectively.
Research firm Deloitte estimated that the total holiday retail sales in 2023 will be in the range of $1.54 to $1.56 trillion during the November to January timeframe. This marks an year-over-year improvement of 3.5% to 4.6% in 2023. Deloitte also forecast that within the total holiday retail sales, e-commerce sales will account for $278 billion to $284 billion. This marks a year-over-year improvement of 10.3% to 12.8%.
Reuters reported that online sales are likely to grow 4.8% year over year during the holiday season of 2023. Bain & Company forecasts nominal U.S. retail sales to grow 3% year over year in November and December, reaching nearly $915 billion, with 90% of the growth coming from non-store (e-commerce and mail-order) sales.
Our Top Picks
We have narrowed our search to five heavyweight U.S. wholesale retailers that have strong potential for the rest of 2023. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Walmart Inc. (WMT - Free Report) has been benefiting from its robust omnichannel operations due to its efforts to enhance store and online experience. WMT has been particularly gaining from its efforts to boost delivery services.
Increased market share in grocery continued to boost U.S. comps in the first quarter of fiscal 2024. Strong comps growth globally, expense leverage and e-commerce growth across all units favored the company. WMT raised its guidance for fiscal 2024.
Walmart has an expected revenue and earnings growth rate of 95% and 2.4%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days.
The TJX Companies Inc. (TJX - Free Report) is benefiting from its solid store and e-commerce growth efforts. TJX’s off-price business model, strategic store locations, impressive brands and fashion products and supply-chain management have been working well. TJX’s Marmaxx segment is doing particularly well, wherein comp store sales increased in the first quarter of fiscal 2024, backed by improved customer traffic.
The TJX Companies has an expected revenue and earnings growth rate of 17.5% and 19.6%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.
Costco Wholesale Corp. (COST - Free Report) has been surviving the market turmoil buoyed by its key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping COST register impressive sales and earnings numbers.
We expect Costco to register a 5.6% adjusted earnings per share improvement in fiscal 2024 on 3.7% revenue growth. This outlook accounts for the businesses’ ability to navigate the ongoing inflationary environment and supply chain bottlenecks on several fronts. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help COST going forward.
Costco Wholesale has an expected revenue and earnings growth rate of 4.6% and 7.2%, respectively, for the current year (ending August 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Deckers Outdoor Corp. (DECK - Free Report) has been benefiting from its strength in the UGG and HOKA brands. Solid gains from the direct-to-consumer channels, brand growth, a strong balance sheet and a stable operating model favor DECK.
Solid momentum in DECK’s global wholesale business, driven by robust consumer demand in both domestic and international markets, appears encouraging as well. DECK envisions fiscal 2024 net sales to increase 11% from the prior-year quarter.
Deckers Outdoor has an expected revenue and earnings growth rate of 10.8% and 20.2%, respectively, for the current year (ending March 2024). The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last seven days.
Ross Stores Inc. (ROST - Free Report) has benefited from positive customer response to its improved merchandise and strong value offerings. ROST has been benefiting from the execution of its store expansion plans over the years.
ROST operates a chain of off-price retail apparel and home accessories stores, which target value-conscious men and women, aged 25 to 54 in middle-to-upper middle-class households. ROST has a proven business model as the competitive bargains it offers continue to make its stores attractive destinations for customers in all economic scenarios.
Ross Stores has an expected revenue and earnings growth rate of 7.1% and 19.4%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the last 60 days.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
5 Wholesalers to Buy Ahead of the Holiday Season
With the onset of November, the U.S. economy has entered into the festive season. Recently, reported several economic data have shown that the fundamentals of the economy remain rock solid despite the Fed kept the benchmark lending rate at 22 years high.
The U.S. economy grew at an astonishing 4.9% in third-quarter 2023. Personal expenditure climbed to 0.7% month over month in September despite dwindling personal income and savings rate. Retail sales also jumped 0.7% in September, surpassing the consensus mark of 0.3%.
Consequently, holiday retail sales are likely to remain strong this year. Mastercard SpendingPulse estimated holiday retail sales (excluding automotive) between Nov 1 and Dec 24, to increase 3.7% year over year. E-commerce and online sales are likely to grow 6.7% and 2.9%, respectively.
Research firm Deloitte estimated that the total holiday retail sales in 2023 will be in the range of $1.54 to $1.56 trillion during the November to January timeframe. This marks an year-over-year improvement of 3.5% to 4.6% in 2023. Deloitte also forecast that within the total holiday retail sales, e-commerce sales will account for $278 billion to $284 billion. This marks a year-over-year improvement of 10.3% to 12.8%.
Reuters reported that online sales are likely to grow 4.8% year over year during the holiday season of 2023. Bain & Company forecasts nominal U.S. retail sales to grow 3% year over year in November and December, reaching nearly $915 billion, with 90% of the growth coming from non-store (e-commerce and mail-order) sales.
Our Top Picks
We have narrowed our search to five heavyweight U.S. wholesale retailers that have strong potential for the rest of 2023. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The chart below shows the price performance of our five picks in the past month.
Image Source: Zacks Investment Research
Walmart Inc. (WMT - Free Report) has been benefiting from its robust omnichannel operations due to its efforts to enhance store and online experience. WMT has been particularly gaining from its efforts to boost delivery services.
Increased market share in grocery continued to boost U.S. comps in the first quarter of fiscal 2024. Strong comps growth globally, expense leverage and e-commerce growth across all units favored the company. WMT raised its guidance for fiscal 2024.
Walmart has an expected revenue and earnings growth rate of 95% and 2.4%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.2% over the last seven days.
The TJX Companies Inc. (TJX - Free Report) is benefiting from its solid store and e-commerce growth efforts. TJX’s off-price business model, strategic store locations, impressive brands and fashion products and supply-chain management have been working well. TJX’s Marmaxx segment is doing particularly well, wherein comp store sales increased in the first quarter of fiscal 2024, backed by improved customer traffic.
The TJX Companies has an expected revenue and earnings growth rate of 17.5% and 19.6%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last seven days.
Costco Wholesale Corp. (COST - Free Report) has been surviving the market turmoil buoyed by its key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping COST register impressive sales and earnings numbers.
We expect Costco to register a 5.6% adjusted earnings per share improvement in fiscal 2024 on 3.7% revenue growth. This outlook accounts for the businesses’ ability to navigate the ongoing inflationary environment and supply chain bottlenecks on several fronts. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help COST going forward.
Costco Wholesale has an expected revenue and earnings growth rate of 4.6% and 7.2%, respectively, for the current year (ending August 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.1% over the last seven days.
Deckers Outdoor Corp. (DECK - Free Report) has been benefiting from its strength in the UGG and HOKA brands. Solid gains from the direct-to-consumer channels, brand growth, a strong balance sheet and a stable operating model favor DECK.
Solid momentum in DECK’s global wholesale business, driven by robust consumer demand in both domestic and international markets, appears encouraging as well. DECK envisions fiscal 2024 net sales to increase 11% from the prior-year quarter.
Deckers Outdoor has an expected revenue and earnings growth rate of 10.8% and 20.2%, respectively, for the current year (ending March 2024). The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the last seven days.
Ross Stores Inc. (ROST - Free Report) has benefited from positive customer response to its improved merchandise and strong value offerings. ROST has been benefiting from the execution of its store expansion plans over the years.
ROST operates a chain of off-price retail apparel and home accessories stores, which target value-conscious men and women, aged 25 to 54 in middle-to-upper middle-class households. ROST has a proven business model as the competitive bargains it offers continue to make its stores attractive destinations for customers in all economic scenarios.
Ross Stores has an expected revenue and earnings growth rate of 7.1% and 19.4%, respectively, for the current year (ending January 2024). The Zacks Consensus Estimate for current-year earnings has improved 6.1% over the last 60 days.