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5 Stocks to Buy as Retail Sales Soar on Solid Holiday Spending
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The retail sector is staging a solid comeback, surpassing economists’ forecasts and roaring back to normal as inflation continues to ease. Retail sales totaled $709.9 billion, increasing 0.6% month over month in December and beating the consensus estimate of a rise of 0.4%, the Commerce Department said on Jan 17.
On a year-over-year basis, retail sales grew 5.6% in December. Sales primarily got a boost from the holiday season shopping that saw Americans spending lavishly on buying goods. Online sales rose 1.5% in December on a month-over-month basis.
Nine of the 13 categories in the retail sector recorded growth. Sales at clothing and accessories stores increased 1.5%. Sales at restaurants increased 11.3% year over year in December.
Core retail sales, which excludes auto and gas, increased 4.9% year over year. On a month-over-month basis, core retail sales jumped 0.6%.
The report once again shows the underlying strength in the economy as it entered the new year, with expectations soaring of the Federal Reserve going for interest rate cuts.
The retail sector took a major hit last year as the Federal Reserve took an aggressive monetary tightening stance to curb multi-decade-high inflation. The central bank increased interest rates by 525 basis points since Mach 2022, compelling consumers to spend cautiously and cut down on expenditures.
However, the retail sector put up a solid fight and sales increased at a steady pace. The December report comes at a time when the Federal Reserve is planning to end its interest rate hikes and go for rate cuts.
Rate cuts bode well for the retail sector as lower borrowing costs will allow consumers to spend more freely, which will drive sales.
Our Choices
Given the encouraging economic environment and increase in retail sales, it would be prudent for savvy investors to consider betting on retail stocks like Amazon.com, Inc. (AMZN - Free Report) , Casey's General Stores, Inc. (CASY - Free Report) , Target Corporation (TGT - Free Report) , Abercrombie & Fitch (ANF - Free Report) and The Gap, Inc. (GPS - Free Report) that stand to benefit directly from these favorable conditions.Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America and across the globe. AMZN’s online retail business revolves around the Prime program and is well supported by its massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish its footprint in the physical grocery supermarket space.
Amazon.com’sexpected earnings growth rate for the current year is 278.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. AMZN presently sports a Zacks Rank #1.
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 next year is 9%. The Zacks Consensus Estimate for current-year earnings has improved 10.3% over the past 60 days. CASY presently sports a Zacks Rank #1.
Target Corporation has evolved from just being a pure brick & mortar retailer to an omni-channel entity. TGT has been making investments in technologies, improving websites and mobile apps and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players. Target Corporation provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids.
Target Corporation’s expected earnings growth rate for the current year is 38.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. TGT has a Zacks Rank #2.
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 2,320%. The Zacks Consensus Estimate for current-year earnings has improved 35.3% over the past 60 days. ANF currently sports a Zacks Rank #1.
The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. GPS offers products for men, women and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.
The Gap’sexpected earnings growth rate for the current year is 388%. The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the past 60 days. GPS currently sports a Zacks Rank #1.
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5 Stocks to Buy as Retail Sales Soar on Solid Holiday Spending
The retail sector is staging a solid comeback, surpassing economists’ forecasts and roaring back to normal as inflation continues to ease. Retail sales totaled $709.9 billion, increasing 0.6% month over month in December and beating the consensus estimate of a rise of 0.4%, the Commerce Department said on Jan 17.
On a year-over-year basis, retail sales grew 5.6% in December. Sales primarily got a boost from the holiday season shopping that saw Americans spending lavishly on buying goods. Online sales rose 1.5% in December on a month-over-month basis.
Nine of the 13 categories in the retail sector recorded growth. Sales at clothing and accessories stores increased 1.5%. Sales at restaurants increased 11.3% year over year in December.
Core retail sales, which excludes auto and gas, increased 4.9% year over year. On a month-over-month basis, core retail sales jumped 0.6%.
The report once again shows the underlying strength in the economy as it entered the new year, with expectations soaring of the Federal Reserve going for interest rate cuts.
The retail sector took a major hit last year as the Federal Reserve took an aggressive monetary tightening stance to curb multi-decade-high inflation. The central bank increased interest rates by 525 basis points since Mach 2022, compelling consumers to spend cautiously and cut down on expenditures.
However, the retail sector put up a solid fight and sales increased at a steady pace. The December report comes at a time when the Federal Reserve is planning to end its interest rate hikes and go for rate cuts.
Rate cuts bode well for the retail sector as lower borrowing costs will allow consumers to spend more freely, which will drive sales.
Our Choices
Given the encouraging economic environment and increase in retail sales, it would be prudent for savvy investors to consider betting on retail stocks like Amazon.com, Inc. (AMZN - Free Report) , Casey's General Stores, Inc. (CASY - Free Report) , Target Corporation (TGT - Free Report) , Abercrombie & Fitch (ANF - Free Report) and The Gap, Inc. (GPS - Free Report) that stand to benefit directly from these favorable conditions.Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America and across the globe. AMZN’s online retail business revolves around the Prime program and is well supported by its massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish its footprint in the physical grocery supermarket space.
Amazon.com’sexpected earnings growth rate for the current year is 278.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.7% over the past 60 days. AMZN presently sports a Zacks Rank #1.
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 next year is 9%. The Zacks Consensus Estimate for current-year earnings has improved 10.3% over the past 60 days. CASY presently sports a Zacks Rank #1.
Target Corporation has evolved from just being a pure brick & mortar retailer to an omni-channel entity. TGT has been making investments in technologies, improving websites and mobile apps and modernizing the supply chain to keep pace with the changing retail landscape and better compete with pure e-commerce players. Target Corporation provides an array of goods ranging from household essentials and electronics to toys and apparel for men, women and kids.
Target Corporation’s expected earnings growth rate for the current year is 38.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.6% over the past 60 days. TGT has a Zacks Rank #2.
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 2,320%. The Zacks Consensus Estimate for current-year earnings has improved 35.3% over the past 60 days. ANF currently sports a Zacks Rank #1.
The Gap, Inc. is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. GPS offers products for men, women and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.
The Gap’sexpected earnings growth rate for the current year is 388%. The Zacks Consensus Estimate for current-year earnings has improved 17.3% over the past 60 days. GPS currently sports a Zacks Rank #1.