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Retail Sales Continue to Soar on Robust Demand: 4 Stocks with Upside
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Key Takeaways
U.S. retail sales rose 0.6% in August to $732B, marking the third straight monthly gain.
Sales growth was fueled by autos, clothing, sporting goods, restaurants, and more.
BROS, CASY, URBN and W all posted earnings estimate upgrades over the past 60 days.
U.S. retail sales rose in August at a solid pace. The jump came despite growing concerns over a slowing economy and a weakening jobs market amid continued price pressures.
However, the growth suggests that demand for goods continues to be high and consumers are willing to spend despite inflationary pressures. Given this situation, it would be ideal to invest in retail stocks. We have selected four stocks, namely, Dutch Bros Inc. (BROS - Free Report) , Casey's General Stores, Inc. (CASY - Free Report) , Urban Outfitters, Inc. (URBN - Free Report) and Wayfair Inc. (W - 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 Jump
The Commerce Department reported on Tuesday that retail sales totaled $732 billion in August, increasing 0.6% sequentially and easily beating the consensus estimate of a rise of 0.3%.
On a year-over-year basis, retail sales rose 5% in August. July’s figures were also upwardly revised to 0.6%. Although higher prices of goods played a role, August retail sales were primarily driven by demand for a wide range of products.
Sales at auto dealerships increased 0.5%. Sales at sporting goods, musical instrument and book stores rose 0.8%, while receipts at clothing stores climbed 1%. Sales at food and beverage stores grew 0.3%.
Online sales rose 0.2% in August, while sales at electronics and appliance stores advanced 0.3%.
Retail Sales Poised to Grow
Rising prices have been putting pressure on households, as concerns over the economy’s health grow. However, solid demand has been pushing consumers to spend at an impressive pace—the solid jump in August marks the third straight month of growth in retail sales.
Sales rose 0.7% at restaurants and drinking places, the only service segment in the retail sales report. Restaurant sales are considered a key indicator of household expenses.
President Donald Trump’s tariffs have already started showing their impact, with prices of goods rising over the past couple of months. However, consumers are hopeful that the impact of tariffs will be less severe than expected, following the Trump administration's trade deals with several trading partners.
The retail sales report came just a day ahead of the end of the Fed’s two-day policy meeting. The Federal Reserve is expected to cut interest rates by a quarter percentage point on Wednesday. Lower borrowing rates bode well for the retail sector and the broader economy.
4 Retail Stocks With Growth Potential
Dutch Bros Inc.
Dutch Bros Inc. is an operator and franchisor of drive-thru shops that offer high-quality, hand-crafted beverages with unparalleled speed and superior service.
Dutch Bros’ expected earnings growth rate for the next year is 38.8%. The Zacks Consensus Estimate for current-year earnings has improved 15.3% over the past 60 days. BROS presently carries 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 8.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. CASY currently has a Zacks Rank #2.
Urban Outfitters
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the past 60 days. URBN currently carries a Zacks Rank #2.
Wayfair Inc.
Wayfair Inc. is one of the world's leading online sellers of home goods products, consisting of furniture and home decor. W operates worldwide through Wayfair.com and four other branded websites, namely, Joss & Main, AllModern, Birch Lane and Perigold. The company currently offers more than 40 million products from more than 20,000 suppliers.
Wayfair’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. W presently has a Zacks Rank #2.
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Retail Sales Continue to Soar on Robust Demand: 4 Stocks with Upside
Key Takeaways
U.S. retail sales rose in August at a solid pace. The jump came despite growing concerns over a slowing economy and a weakening jobs market amid continued price pressures.
However, the growth suggests that demand for goods continues to be high and consumers are willing to spend despite inflationary pressures. Given this situation, it would be ideal to invest in retail stocks. We have selected four stocks, namely, Dutch Bros Inc. (BROS - Free Report) , Casey's General Stores, Inc. (CASY - Free Report) , Urban Outfitters, Inc. (URBN - Free Report) and Wayfair Inc. (W - 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 Jump
The Commerce Department reported on Tuesday that retail sales totaled $732 billion in August, increasing 0.6% sequentially and easily beating the consensus estimate of a rise of 0.3%.
On a year-over-year basis, retail sales rose 5% in August. July’s figures were also upwardly revised to 0.6%. Although higher prices of goods played a role, August retail sales were primarily driven by demand for a wide range of products.
Sales at auto dealerships increased 0.5%. Sales at sporting goods, musical instrument and book stores rose 0.8%, while receipts at clothing stores climbed 1%. Sales at food and beverage stores grew 0.3%.
Online sales rose 0.2% in August, while sales at electronics and appliance stores advanced 0.3%.
Retail Sales Poised to Grow
Rising prices have been putting pressure on households, as concerns over the economy’s health grow. However, solid demand has been pushing consumers to spend at an impressive pace—the solid jump in August marks the third straight month of growth in retail sales.
Sales rose 0.7% at restaurants and drinking places, the only service segment in the retail sales report. Restaurant sales are considered a key indicator of household expenses.
President Donald Trump’s tariffs have already started showing their impact, with prices of goods rising over the past couple of months. However, consumers are hopeful that the impact of tariffs will be less severe than expected, following the Trump administration's trade deals with several trading partners.
The retail sales report came just a day ahead of the end of the Fed’s two-day policy meeting. The Federal Reserve is expected to cut interest rates by a quarter percentage point on Wednesday. Lower borrowing rates bode well for the retail sector and the broader economy.
4 Retail Stocks With Growth Potential
Dutch Bros Inc.
Dutch Bros Inc. is an operator and franchisor of drive-thru shops that offer high-quality, hand-crafted beverages with unparalleled speed and superior service.
Dutch Bros’ expected earnings growth rate for the next year is 38.8%. The Zacks Consensus Estimate for current-year earnings has improved 15.3% over the past 60 days. BROS presently carries 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 8.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. CASY currently has a Zacks Rank #2.
Urban Outfitters
Urban Outfitters is a lifestyle specialty retailer that offers fashion apparel and accessories, footwear, home decor and gift products. URBN merchandise is generally sold directly to consumers through stores, catalogs, call centers and e-commerce platforms. Urban Outfitters has operations in the United States, Canada and Europe.
Urban Outfitters’ expected earnings growth rate for the current year is 8.2%. The Zacks Consensus Estimate for current-year earnings has improved 3.4% over the past 60 days. URBN currently carries a Zacks Rank #2.
Wayfair Inc.
Wayfair Inc. is one of the world's leading online sellers of home goods products, consisting of furniture and home decor. W operates worldwide through Wayfair.com and four other branded websites, namely, Joss & Main, AllModern, Birch Lane and Perigold. The company currently offers more than 40 million products from more than 20,000 suppliers.
Wayfair’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved more than 100% over the past 60 days. W presently has a Zacks Rank #2.