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Consumer outlays unpredictably picked up in November, triggering an encouraging start to the holiday season. Sales at U.S. retailers rose a promising 0.3% in November, in contrast to analysts’ expectations of a decrease of 0.1%, per the Commerce Department. Retail sales, in reality, bounced back in November after declining 0.2% in October.
Barring autos, sales at U.S. retailers increased 0.2%, while excluding autos and gas, sales rose 0.6%. This shows that despite price pressures in November, consumers were able to splurge on discretionary items. Lest we forget, the consumer price index (CPI) increased 0.1% month over month in November.
U.S. retail and food service sales jumped 4.1% year over year in November, and from September through November, sales were up 3.4% compared to the same period a year ago. Thus, on a yearly basis, retail sales increased more than the CPI rate of 3.1%, a tell-tale sign that consumers have the wherewithal to spend banking on a strong labor market.
The unemployment rate is hovering at a level not seen in almost a half-century. Most Americans can find a job. Wages are also increasing at a faster pace than inflation. Thanks to such strength in the labor market, retail sales held up despite a decline of 2.9% in receipts at gas stations as energy prices took a beating during the month. However, from a consumer’s perspective, it’s a piece of good news as they have to spend less on fuel.
The drop in gas station sales was offset by an uptick of 1.6% at bars and eateries, a 1.3% increase at sporting goods outlets, and a 1% gain at online retailers such as Amazon Inc. (AMZN - Free Report) . Sales also picked up at apparel, furniture, and healthcare stores. People are opening up their wallets as they are feeling confident about their well-being and the broader economy.
But it’s just not in November, retail sales are expected to improve further in December as well. The Federal Reserve’s less aggressive monetary policy, coupled with the offline and online deals, is expected to entice consumers to spend more on nonobligatory items and benefit retailers.
Hence, it’s sensible for astute investors to invest in retailers such as Hibbett Sports (HIBB - Free Report) , Carrols Restaurant Group (TAST - Free Report) and American Eagle Outfitters (AEO - Free Report) that directly gain from this promising economic backdrop and an uptick in retail sales.
These stocks carry 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.
Hibbett Sports has evolved its offerings from sports goods to an athletic-inspired, fashion-focused assortment. HIBB currently has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 11.6% over the past 60 days. The company’s expected earnings growth for next year is 8.5%.
Carrols Restaurant is the largest BURGER KING franchisee in the United States. TAST currently has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 29.7% over the past 60 days. The company’s expected earnings growth for next year is 8.3%.
American Eagle Outfitters is a specialty retailer of casual apparel. AEO currently has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 4.7% over the past 60 days. The company’s expected earnings growth for the next five-year period is 18.9%.
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3 Stocks to Gain From a Rebound in Retail Sales
Consumer outlays unpredictably picked up in November, triggering an encouraging start to the holiday season. Sales at U.S. retailers rose a promising 0.3% in November, in contrast to analysts’ expectations of a decrease of 0.1%, per the Commerce Department. Retail sales, in reality, bounced back in November after declining 0.2% in October.
Barring autos, sales at U.S. retailers increased 0.2%, while excluding autos and gas, sales rose 0.6%. This shows that despite price pressures in November, consumers were able to splurge on discretionary items. Lest we forget, the consumer price index (CPI) increased 0.1% month over month in November.
U.S. retail and food service sales jumped 4.1% year over year in November, and from September through November, sales were up 3.4% compared to the same period a year ago. Thus, on a yearly basis, retail sales increased more than the CPI rate of 3.1%, a tell-tale sign that consumers have the wherewithal to spend banking on a strong labor market.
The unemployment rate is hovering at a level not seen in almost a half-century. Most Americans can find a job. Wages are also increasing at a faster pace than inflation. Thanks to such strength in the labor market, retail sales held up despite a decline of 2.9% in receipts at gas stations as energy prices took a beating during the month. However, from a consumer’s perspective, it’s a piece of good news as they have to spend less on fuel.
The drop in gas station sales was offset by an uptick of 1.6% at bars and eateries, a 1.3% increase at sporting goods outlets, and a 1% gain at online retailers such as Amazon Inc. (AMZN - Free Report) . Sales also picked up at apparel, furniture, and healthcare stores. People are opening up their wallets as they are feeling confident about their well-being and the broader economy.
But it’s just not in November, retail sales are expected to improve further in December as well. The Federal Reserve’s less aggressive monetary policy, coupled with the offline and online deals, is expected to entice consumers to spend more on nonobligatory items and benefit retailers.
Hence, it’s sensible for astute investors to invest in retailers such as Hibbett Sports (HIBB - Free Report) , Carrols Restaurant Group (TAST - Free Report) and American Eagle Outfitters (AEO - Free Report) that directly gain from this promising economic backdrop and an uptick in retail sales.
These stocks carry 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.
Hibbett Sports has evolved its offerings from sports goods to an athletic-inspired, fashion-focused assortment. HIBB currently has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 11.6% over the past 60 days. The company’s expected earnings growth for next year is 8.5%.
Carrols Restaurant is the largest BURGER KING franchisee in the United States. TAST currently has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 29.7% over the past 60 days. The company’s expected earnings growth for next year is 8.3%.
American Eagle Outfitters is a specialty retailer of casual apparel. AEO currently has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has increased 4.7% over the past 60 days. The company’s expected earnings growth for the next five-year period is 18.9%.