The U.S. retail sector has struggled over the past couple of years, but it has attempted to maintain its position. Retail sales jumped in June despite price pressures and the impact of President Donald Trump’s tariffs.

The robust jump in June suggests that the economy is still holding strong, which will give the Federal Reserve reasons to delay its rate cuts. Given this situation, it would be ideal to invest in retail stocks. We have selected five, namely, Amazon.com, Inc. (AMZN Quick QuoteAMZN - Free Report) , Dollar Tree, Inc. (DLTR Quick QuoteDLTR - Free Report) , Advance Auto Parts, Inc. (AAP Quick QuoteAAP - Free Report) , Casey's General Stores, Inc. (CASY Quick QuoteCASY - Free Report) and Levi Strauss & Co. (LEVI Quick QuoteLEVI - Free Report) for investors.

These stocks have seen positive earnings estimate revisions in the past 60 days, carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), and are set for solid returns. You can see the complete list of today’s Zacks #1 Rank stocks here.

Retail Sales Rebound

Retail sales totaled $720.1 billion in June, jumping a solid 0.6% month over month, after declining 0.9% in May. June’s figures also surpassed analysts’ expectations of a rise of 0.1%. Year over year, retail rose 3.9% in June.

Sales were driven by a rise in auto dealerships, with receipts jumping 1.2%. Sales at building material garden equipment stores rose 0.9% last month. Online retail sales jumped 0.4%, while those at sporting goods, hobby and book stores grew 0.2%.

Sales at food and drinking places, the only services component in the retail sales report, rose 0.6% in June. Economists view restaurant sales as a key indicator of household finances.

Retail Sales to Grow

The robust jump in June proves that consumers are not hesitant to spend despite price pressures. Trump’s tariffs have already been showing their impact, with prices of goods increasing at a steady pace.

Although tariff-driven price increases played a role in pushing retail sales higher in June, the jump will give the Federal Reserve cover to keep its interest rates unchanged in the range of 4.25-4.5% in its July meeting.

However, market participants remain confident that more trade deals between the United States and its trading partners will be reached before the Aug. 1 tariff deadline and the impact will not be as great as it is being feared once they finally come into effect.

Also, the Federal Reserve, despite maintaining a hawkish stance, still plans to go for two 25-basis-point rate cuts by the end of this year. Lower borrowing rates bode well for the retail sector and the broader economy.

5 Retail Stocks With Growth Potential

Amazon.com, Inc.

Amazon.com, Inc. is one of the largest e-commerce providers, with sprawling operations in North America, now spreading across the globe. AMZN’s online retail business revolves around the Prime program, well-supported by the company’s massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish a footprint in the physical grocery supermarket space. AMZN also enjoys a dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services.

Amazon.com has an expected earnings growth rate of 13.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the last 60 days. AMZN presently sports a Zacks Rank #1.

Dollar Tree

Dollar Tree, Inc. is an operator of discount variety stores offering merchandise and other assortments. DLTR’s stores successfully operate in major metropolitan areas, mid-sized cities and small towns. Dollar Tree offers a wide range of quality everyday general merchandise in many categories, including houseware, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items.

Dollar Tree’s expected earnings growth rate for the current year is 7.8%. The Zacks Consensus Estimate for Dollar Tree’s current-year earnings has improved 3.8% over the past 60 days. DLTR has a Zacks Rank #2.

Advance Auto Parts, Inc.

Advance Auto Parts, Inc. is primarily engaged in selling replacement parts (excluding tires), accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles, light and heavy-duty trucks. AAP is a leading automotive parts provider in North America, serving both do-it-yourself and professional installers, as well as independently owned operators.

Advance Auto Parts’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for Advance Auto Parts’ current-year earnings has improved 19.5% over the past 60 days. AAP has a Zacks Rank #2.

Casey's General Stores

Casey's General Stores, Inc. operates convenience stores under the Casey's and Casey's General Store names in 16 states, mainly Iowa, Missouri and Illinois. CASY offers a comprehensive range of products and services to meet the needs of its customers. In addition to fuel, the stores provide a wide variety of merchandise, including groceries, prepared food, snacks, beverages, tobacco products, health and beauty aids, school supplies, housewares, pet supplies and automotive supplies.

Casey’s has an expected earnings growth rate of 7.2% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the last 60 days. CASY currently has a Zacks Rank #2.

Levi Strauss & Co

Levi Strauss & Co. designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's, Dockers, Signature by Levi Strauss & Co. and Denizen brands. LEVI’s products are sold through chain retailers, department stores, online sites and brand-dedicated retail stores, and shop-in-shops. Levi Strauss & Co. is based in San Francisco.

Levi Strauss & Co.’s expected earnings growth rate for the current year is 4%. The Zacks Consensus Estimate for current-year earnings has improved 5.7% over the past 60 days. LEVI carries a Zacks Rank #1.