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4 Retail Stocks to Buy as the Sector Continues to Grow
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Retail sales picked up to close out 2023 on a Fed outlook that projected at least three interest rate cuts in 2024 and the holiday spirit, which ensured that consumers spent on staples and discretionaries.
The retail sales numbers for November released in December painted a rosy picture. Per the Commerce Department, retail sales rose 0.3% from October to $705.7 billion, widely surpassing the consensus estimate of 0.1%. The October number was revised up to a 0.2% loss from the previously reported 0.1% loss.
Inflation and purchasing power have the biggest impact on retail sales. When prices of consumer goods are in a state of continuous increase and interest rates are raised as a retaliatory measure, people have less money at their disposal to spend on non-essential goods. Headline consumer-side inflation, however, increased 0.1% in November after remaining unchanged in October, well below the core number, indicating decelerating food and oil prices.
Also, with further interest hikes currently deemed unlikely to be declared in 2024 and investors expecting the first rate cuts as early as March 2024, a consumer’s purchasing ability will be getting a boost. Per the National Retail Federation, retail sales are supposed to grow between 4% and 6% in 2023.
Jobs and wage gains, alongside falling energy prices, have supported holiday shopping to round up 2023. Lower inflation for goods has also helped consumers make smart decisions about holiday purchases. With the retail sales report for December slated to come out next week and with the earnings season coming up, the time maybe ripe to consider buying retail stocks.
We have selected four stocks that we believe would be gaining ground in the ensuing months and should be looked into now. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with 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.
American Eagle Outfitters, Inc. (AEO - Free Report) is a specialty retailer that engages in the business of selling clothing, accessories and personal care products.
AEO’s expected earnings growth rate for the current year is 39.2%. The Zacks Consensus Estimate for its current-year earnings has improved 2.3% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie & Fitch Co. (ANF - Free Report) is a specialty retailer that engages in the business of selling clothing, accessories and personal care products.
ANF’s expected earnings growth rate for the current year is 2216%. The Zacks Consensus Estimate for its current-year earnings has improved 30.7% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Casey's General Stores, Inc. (CASY - Free Report) is a chain of convenience stores.
CASY’s expected earnings growth rate for the current year is 9%. The Zacks Consensus Estimate for its current-year earnings has improved 10.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Carrols Restaurant Group, Inc. (TAST - Free Report) is a restaurant franchise.
TAST’s expected earnings growth rate for the current year is 168.6%. The Zacks Consensus Estimate for its current-year earnings has improved 14.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
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4 Retail Stocks to Buy as the Sector Continues to Grow
Retail sales picked up to close out 2023 on a Fed outlook that projected at least three interest rate cuts in 2024 and the holiday spirit, which ensured that consumers spent on staples and discretionaries.
The retail sales numbers for November released in December painted a rosy picture. Per the Commerce Department, retail sales rose 0.3% from October to $705.7 billion, widely surpassing the consensus estimate of 0.1%. The October number was revised up to a 0.2% loss from the previously reported 0.1% loss.
Inflation and purchasing power have the biggest impact on retail sales. When prices of consumer goods are in a state of continuous increase and interest rates are raised as a retaliatory measure, people have less money at their disposal to spend on non-essential goods. Headline consumer-side inflation, however, increased 0.1% in November after remaining unchanged in October, well below the core number, indicating decelerating food and oil prices.
Also, with further interest hikes currently deemed unlikely to be declared in 2024 and investors expecting the first rate cuts as early as March 2024, a consumer’s purchasing ability will be getting a boost. Per the National Retail Federation, retail sales are supposed to grow between 4% and 6% in 2023.
Jobs and wage gains, alongside falling energy prices, have supported holiday shopping to round up 2023. Lower inflation for goods has also helped consumers make smart decisions about holiday purchases. With the retail sales report for December slated to come out next week and with the earnings season coming up, the time maybe ripe to consider buying retail stocks.
We have selected four stocks that we believe would be gaining ground in the ensuing months and should be looked into now. The stocks below flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with 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.
American Eagle Outfitters, Inc. (AEO - Free Report) is a specialty retailer that engages in the business of selling clothing, accessories and personal care products.
AEO’s expected earnings growth rate for the current year is 39.2%. The Zacks Consensus Estimate for its current-year earnings has improved 2.3% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie & Fitch Co. (ANF - Free Report) is a specialty retailer that engages in the business of selling clothing, accessories and personal care products.
ANF’s expected earnings growth rate for the current year is 2216%. The Zacks Consensus Estimate for its current-year earnings has improved 30.7% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Casey's General Stores, Inc. (CASY - Free Report) is a chain of convenience stores.
CASY’s expected earnings growth rate for the current year is 9%. The Zacks Consensus Estimate for its current-year earnings has improved 10.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Carrols Restaurant Group, Inc. (TAST - Free Report) is a restaurant franchise.
TAST’s expected earnings growth rate for the current year is 168.6%. The Zacks Consensus Estimate for its current-year earnings has improved 14.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.