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5 Stocks to Buy as Retail Sales Bounce Back in May
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Retail sales picked up in May as consumers rushed back to stores with the easing of coronavirus-led lockdowns. In the past few months, several retailers had been operating on a limited capacity or had to shut down stores completely due to the COVID-19 outbreak.
On Jun 16, the U.S. Department of Commerce reported that retail and food services sales for May were $485.5 billion, an increase of 17.7% from the month before.The jump in retail sales surpassed the consensus estimate of an 8.2% increase. Sales dropped 8.3% in March and 14.7% in April after coronavirus cases rose in the United States and forced the economy to shut down.
Clothing and accessory stores gained the highest in May, registering a 188% increase. Additionally, sporting goods, hobby, musical instruments and book stores saw a sales surge of 88.2% from April 2020. A significant increase was also recorded in motor vehicle stores as sales jumped 44.1% in May.
Lockdowns imposed due to the coronavirus also boosted sales of non-store retailers and building materials stores that remained operational. Non-store sales jumped 9% from the previous month and rose 30.8% from May 2019. While building materials stores jumped 10.9% for the month, grocers posted a gain of 14.3% year over year.
Restaurant receipts also increased 29.1% after being completely shuttered during the lockdown. In several states,food services and drinking places saw customers coming in as administration allowed outdoor dining after months of being restricted to curbside pickup and delivery only.
The positive retail sales data helped major indexes soar, with the DOW, the S&P 500 and the Nasdaq rallying 2%, 1.9% and 1.8%, respectively, on Jun 16. Additionally, the S&P Retail ETF rose 2.7% and the Van Eck Vectors Retail ETF gained 2.4% on the same day.
5 Stocks to Buy
Given the rebound in May, it appears that retail sales are set to increase further as the economy continues to reopen. In fact, the economy is still making up for lost ground as total sales was 6.1% lower than the year ago.
We have shortlisted five stocks that flaunt a Zacks Rank #1(Strong Buy) andcan enjoy the boom as consumers are likely to continue spending in the months ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots, Inc. (BIG - Free Report) offers food, furniture, fashion, utility, electronics, toys and accessories. The company’s expected earnings growth rate for the current year is nearly 21% against the Zacks Retail - Discount Stores industry’s projected earnings decline of 5.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 48% over the past 60 days.
Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) operates as an outdoor sporting goods retailer. The company’s expected earnings growth rate for the current year is 63.8% against the Zacks Retail - Apparel and Shoes industry’s projected earnings decline of 29.5%. The Zacks Consensus Estimate for its current-year earnings has moved 20.3% up over the past 60 days.
eBay Inc. (EBAY - Free Report) operates the marketplace and classifieds platforms that connect buyers and sellers. The company’s expected earnings growth rate for the current year is 21.9% compared with the Zacks Internet - Commerce industry’s projected earnings growth of 2%. The Zacks Consensus Estimate for its current-year earnings has climbed 14.6% over the past 60 days.
Wingstop Inc. (WING - Free Report) operates restaurants under the Wingstop brand name. The company’s expected earnings growth rate for the current year is 39.7% against the Zacks Retail - Restaurants industry’s estimated earnings decline of 29.4%. The Zacks Consensus Estimate for its current-year earnings has moved 29.1% north over the past 60 days.
The Kroger Co. (KR - Free Report) operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores. The company’s expected earnings growth rate for the current year is 13.6% compared with the Zacks Retail - Supermarkets industry’s projected earnings growth of 4.9%. The Zacks Consensus Estimate for its current-year earnings has moved up 2.9% over the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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5 Stocks to Buy as Retail Sales Bounce Back in May
Retail sales picked up in May as consumers rushed back to stores with the easing of coronavirus-led lockdowns. In the past few months, several retailers had been operating on a limited capacity or had to shut down stores completely due to the COVID-19 outbreak.
On Jun 16, the U.S. Department of Commerce reported that retail and food services sales for May were $485.5 billion, an increase of 17.7% from the month before.The jump in retail sales surpassed the consensus estimate of an 8.2% increase. Sales dropped 8.3% in March and 14.7% in April after coronavirus cases rose in the United States and forced the economy to shut down.
Clothing and accessory stores gained the highest in May, registering a 188% increase. Additionally, sporting goods, hobby, musical instruments and book stores saw a sales surge of 88.2% from April 2020. A significant increase was also recorded in motor vehicle stores as sales jumped 44.1% in May.
Lockdowns imposed due to the coronavirus also boosted sales of non-store retailers and building materials stores that remained operational. Non-store sales jumped 9% from the previous month and rose 30.8% from May 2019. While building materials stores jumped 10.9% for the month, grocers posted a gain of 14.3% year over year.
Restaurant receipts also increased 29.1% after being completely shuttered during the lockdown. In several states,food services and drinking places saw customers coming in as administration allowed outdoor dining after months of being restricted to curbside pickup and delivery only.
The positive retail sales data helped major indexes soar, with the DOW, the S&P 500 and the Nasdaq rallying 2%, 1.9% and 1.8%, respectively, on Jun 16. Additionally, the S&P Retail ETF rose 2.7% and the Van Eck Vectors Retail ETF gained 2.4% on the same day.
5 Stocks to Buy
Given the rebound in May, it appears that retail sales are set to increase further as the economy continues to reopen. In fact, the economy is still making up for lost ground as total sales was 6.1% lower than the year ago.
We have shortlisted five stocks that flaunt a Zacks Rank #1(Strong Buy) andcan enjoy the boom as consumers are likely to continue spending in the months ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots, Inc. (BIG - Free Report) offers food, furniture, fashion, utility, electronics, toys and accessories. The company’s expected earnings growth rate for the current year is nearly 21% against the Zacks Retail - Discount Stores industry’s projected earnings decline of 5.7%. The Zacks Consensus Estimate for its current-year earnings has moved up 48% over the past 60 days.
Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) operates as an outdoor sporting goods retailer. The company’s expected earnings growth rate for the current year is 63.8% against the Zacks Retail - Apparel and Shoes industry’s projected earnings decline of 29.5%. The Zacks Consensus Estimate for its current-year earnings has moved 20.3% up over the past 60 days.
eBay Inc. (EBAY - Free Report) operates the marketplace and classifieds platforms that connect buyers and sellers. The company’s expected earnings growth rate for the current year is 21.9% compared with the Zacks Internet - Commerce industry’s projected earnings growth of 2%. The Zacks Consensus Estimate for its current-year earnings has climbed 14.6% over the past 60 days.
Wingstop Inc. (WING - Free Report) operates restaurants under the Wingstop brand name. The company’s expected earnings growth rate for the current year is 39.7% against the Zacks Retail - Restaurants industry’s estimated earnings decline of 29.4%. The Zacks Consensus Estimate for its current-year earnings has moved 29.1% north over the past 60 days.
The Kroger Co. (KR - Free Report) operates supermarkets, multi-department stores, marketplace stores, and price impact warehouse stores. The company’s expected earnings growth rate for the current year is 13.6% compared with the Zacks Retail - Supermarkets industry’s projected earnings growth of 4.9%. The Zacks Consensus Estimate for its current-year earnings has moved up 2.9% over the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>