The holiday season turned out to be a blissful one as consumers continued to fill their shopping carts. Even six fewer days between Thanksgiving and Christmas compared with last year could not take away the sheen of the season. A buoyant stock market, sturdy labor market, rising income and improving consumer confidence worked in favor of retailers.
Notably, retailers stay on their toes during the holiday season, the busiest part of the year, flooding the market with offers and promotions. They sweep buyers off their feet with early-hour store openings, huge discounts, promotional strategies, and free shipping on online purchases. Since the season accounts for a sizeable chunk of yearly revenues, retailers grab every opportunity to drive footfall. Not to mention, these come at the cost of margins.
Holiday season and retail are synonymous, and this festive period Americans were in the mood to spend. A report from National Retail Federation (NRF) indicates that holiday retail sales, excluding automobile dealers, gasoline stations and restaurants, increased 4.1% year over year to $730.2 billion during 2019. Meanwhile, the retail trade association also highlighted that online and other non-store sales rose 14.6% to $167.8 billion during the festive season.
3 Retailers Who Raised a Toast
Zumiez Registers Strong Holiday Sales Growth
The season turned out to be a jolly good one for Zumiez Inc. (ZUMZ - Free Report) . The impressive performance prompted management to lift sales and earnings view for fourth-quarter fiscal 2019. The company reported 6.8% comparable sales growth for the nine-week period (ended Jan 4, 2020) compared with 4% growth witnessed in the nine-week period (ended Jan 5, 2019).
The company now expects comparable sales for the final quarter to increase around 6% compared with prior view of 2-4% growth. Adjusted earnings per share for the fourth quarter are anticipated to be $1.34-$1.38, up from previous estimate of $1.26-$1.32.
This Zacks Rank #1 (Strong Buy) company has been gaining from providing differentiated assortments. The company has considerably improved customers’ experience by integrating its physical and digital networks. This allows customers to access inventories through all channels, alongside availing facilities like buy online, pick up in store, and reserve online and pay in store. You can see the complete list of today’s Zacks #1 Rank stocks here.
Signet’s Numbers Raise Investors’ Fervor
Signet Jewelers Limited (SIG - Free Report) reported better-than-anticipated holiday sales numbers. The impressive performance also prompted management to lift fourth quarter and fiscal 2020 view. Total same store sales for the nine-week period ended Jan 4, 2020, inched up 1.6%. E-commerce sales increased 13.5% year over year to $252.3 million.
For fiscal 2020, the company expects 0.1% year-over-year rise in same-store sales now, which was earlier projected to decline 1-1.7%. The company now expects adjusted earnings in the range of $3.61-$3.69 per share, up from $3.11-$3.29 mentioned earlier. For the fourth quarter, the company now projects same-store sales to rise 1.1% year over year compared with its prior guided range of 2-4% decline. Further, it anticipates adjusted earnings per share in the range of $3.44-$3.52. Management had earlier anticipated the metric between $3.01 and $3.16.
Management highlighted that the company’s significant investments to augment digital sales, and strength in merchandising and marketing strategies aided e-commerce as well as brick and mortar sales growth in North America. In fact, this Zacks Rank #1 company is also benefitting from its ‘Signet Path to Brilliance’ plan.
lululemon Holiday Sales Report Excites
lululemon athletica inc. (LULU - Free Report) witnessed continued momentum during the holiday season in 2019, driven by favorable customer response for its innovative merchandise. This persuaded management to raise fourth-quarter fiscal 2019 view.
lululemon now envisions fourth-quarter revenues between $1.370 billion and $1.380 billion compared with $1.315-$1.330 billion mentioned earlier. The guidance is based on constant-dollar comparable store sales (comps) growth of mid-to-high teens compared with comps growth of low-double digits stated earlier. Further, this Zacks Rank #2 (Buy) company raised earnings per share forecast by nearly 12 cents. It now projects earnings per share of $2.22-$2.25, up from $2.10-$2.13 per share mentioned previously.
Retailers have significantly invested in the expansion of omni-channel offerings in recent years. Same-day delivery, lockers for picking up goods at stores, improved online sites and checkouts, remained prominent this shopping season. Smartphones were the most preferred way to make online purchases this holiday season, accounting for nearly 84% of the holiday season’s e-commerce growth, per MasterCard SpendingPulse. Amazon (AMZN - Free Report) in a release informed that the festive season was a record breaking one with a number of items delivered through Prime free one-day and Prime free same-day delivery nearly quadrupling.
Clearly, the retail industry ended 2019 on a strong footing. Increasing consumer confidence will surely continue to be one of the prominent driving factors in 2020. NRF president and CEO Matthew Shay opined that the holiday sales number instills optimism about higher investment and rising prospects in the industry.
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