Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains dives into some of the best sports and athletic apparel stocks to buy right now with consumer confidence soaring and holiday season shopping set to jump.
The Consumer Confidence Index neared an 18-year high in September. Plus, the National Retail Federation announced last week that it predicts holiday retail spending will jump between 4.3% and 4.8%. The NRF projects that total holiday sales could hit $720.89 billion in 2018. Investors should note that this comes after 2017’s sales popped 5.3% to reach $687.87 billion. “With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy,” NRF chief economist Jack Kleinhenz said in a statement.
The likes of Target (TGT - Free Report) and Walmart (WMT - Free Report) continue to prove that Amazon (AMZN - Free Report) -based fears were overblown. On top of the giants, the retail sector as a whole looks strong and sports apparel seems ready to continue its impressive run. Nike (NKE - Free Report) recently showed that its direct-to-consumer push has paid off as it fights against rival Adidas (ADDYY - Free Report) and continues to outshine Under Armour (UAA - Free Report) .
Yet, three smaller sports retailers all look like buys right now and sport either a Zacks Rank #1 (Strong Buy) or a #2 (Buy). This list includes Lululemon (LULU - Free Report) , Columbia (COLM - Free Report) , and Callaway Golf Company (ELY - Free Report) .
Lululemon is coming off a strong second quarter that saw its revenues climb 25%. The yoga apparel firm’s adjusted quarterly earnings skyrocketed over 97%. Maybe, more importantly, LULU’s comparable store sales jumped 10% and direct-to-consumer revenues soared 48%. The company also looks poised to grow its men’s division as it ramps up its fight against Gap (GPS - Free Report) and others in the still-hot athleisure market.
Callaway has also been on a tear this year and the golf equipment giant looks ready to keep on climbing. J.P. Morgan (JPM - Free Report) analyst Steven Zaccone recently upped his price target for ELY stock, citing increased market share and Tiger Woods-based growth. Even though Woods isn’t a Callaway athlete, Zaccone expects his return to lift golf as a whole. And our Callaway projections help support his expectations.
Lastly, Columbia looks strong as well. The outdoor brand, which includes Mountain Hardwear, Sorel, and PrAna, has been headed in the right direction. Looking ahead, COLM stock could be set to surge on the back of Columbia’s top and bottom line growth.
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