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Get Ahead This Holiday Season: 4 Retail Stocks to Invest In
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Retailers are preparing for the holiday season with as much enthusiasm as shoppers looking for great deals. The season, which accounts for a sizable chunk of yearly revenues, is a make-or-break for retailers. Players in the industry are all geared up to walk the extra mile this festive season to capitalize on any potential upswing in demand. Decent job growth and steady wage gains should support consumer spending.
As inflation continues to ease, purchasing power is gradually improving, fueling spending activity. The recent 50-basis point interest rate cut by the Federal Reserve has boosted confidence in the retail sector. Players like Abercrombie & Fitch Co. (ANF - Free Report) , Burlington Stores, Inc. (BURL - Free Report) , Boot Barn Holdings, Inc. (BOOT - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) are poised to witness improved demand this season. The Mastercard Economics Institute forecast a favorable picture for the holiday season.
Holiday Shopping Forecast 2024: Trends and Insight
According to the Mastercard Economics Institute, U.S. retail sales, excluding automotive, are anticipated to increase by 3.2% between Nov. 1 and Dec. 24. This forecast reflects a slight improvement over the 3.1% increase witnessed last season. Per the report, online spending is expected to rise 7.1% year over year. With a proactive approach and customer-centric offerings, retailers will try to seize every opportunity the season presents.
Black Friday, which traditionally marks the beginning of the holiday season, is falling later this year on Nov. 29 compared with Nov. 24 last year. As a result, market pundits are anticipating that shoppers may delay their purchases, leading to a concentration of holiday spending in December.
Another significant trend is the expected surge in electronics sales, driven by the recent cut in interest rates. With borrowing costs reduced, consumers are likely to splurge on high-tech gadgets, sporting goods and personal care products. Prices in these categories have remained relatively stable since 2023, which may boost demand. The electronics segment, in particular, is projected to witness a sales increase of 6.7% year over year.
The growing preference for online shopping continues to shape the retail landscape, particularly in the apparel sector. Online apparel sales are expected to rise by 4.5%, while in-store sales in this category are projected to grow by a modest 2%. Jewelry, another key holiday gift category, is seeing a shift toward brands that cater to millennial and Gen Z shoppers.
Retailers to Leave No Stone Unturned This Holiday Season
The significance of the holiday season for retailers cannot be overstated. To make the most of the festive season and win over early-bird shoppers, retailers are likely to kickstart promotions earlier this year as well. The influx of enthusiastic shoppers provides retailers with the opportunity to showcase their products, boost revenues and strengthen brand loyalty.
Retailers are investing in creating fast, convenient and secure shopping experiences across both physical stores and online platforms. They are restocking shelves with high-demand products, enhancing their digital presence to improve product visibility and engaging customers through social channels. They are optimizing logistics for smooth operations, especially in light of the recent port strikes on the East and Gulf Coasts, which could potentially disrupt supply chains during the critical holiday season.
That said, we have highlighted four stocks from the Retail - Wholesale sector that look well-positioned based on their sound fundamentals.
Past-Year Stock Price Performance of ANF, BURL, BOOT & BBW
Image Source: Zacks Investment Research
4 Prominent Retail Stocks
Abercrombie & Fitch: Brand Visibility & Global Expansion
Abercrombie & Fitch stands out as a strong investment choice. The company excels in integrating digital and physical retail channels, offering a seamless shopping experience and driving higher customer satisfaction and loyalty. Strategic marketing initiatives, particularly targeted campaigns in key markets, have been effective in boosting brand visibility and customer acquisition. The introduction of innovative product lines meets specific customer needs and broadens the brand's appeal. Abercrombie & Fitch’s regional operating model, with a focus on the Americas, the EMEA (Europe, the Middle East and Africa) and the APAC (Asia-Pacific), provides a solid foundation for global expansion.
This leading, global, omnichannel specialty retailer of apparel and accessories for men, women and kids has a trailing four-quarter earnings surprise of 28%, on average. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share (EPS) suggests growth of 13.1% and 63.4% from the year-ago period. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Burlington: Merchandising Enhancements & Store Productivity
Burlington Stores is a nationally recognized off-price retailer. The company has demonstrated a strong ability to adapt to consumer trends, which gives it a competitive edge in the retail landscape. By staying in tune with customer preferences and adjusting its product offerings, Burlington Stores is well-positioned to capture additional market share. The company has balanced promotions with regular price sales, appealing to budget-conscious shoppers while protecting margins. Its strategic initiatives, including enhancing merchandising capabilities and optimizing store operations, have supported revenue growth. With targeted store openings, relocations and real-time inventory management, Burlington has seized opportunities and improved store productivity.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and EPS suggests growth of 10.1% and 30.5%, respectively, from the year-ago reported figures. This Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 18.4%, on average.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Boot Barn Holdings: A Diverse Product Portfolio
Boot Barn Holdings’ diverse product offerings, which include western wear, boots and outdoor apparel, align well with seasonal trends and attract a broader customer base. The company’s continued investment in enhancing the omnichannel shopping experience allows customers to transition seamlessly between online and physical stores. Targeted marketing campaigns designed to resonate with consumers, along with the introduction of exclusive product lines, distinguish Boot Barn from its competitors. Customer loyalty programs incentivize repeat purchases, while a recovering economy fosters increased consumer confidence and discretionary spending, creating an ideal environment for sales growth.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and EPS suggests growth of 11.5% and 10.3%, respectively, from the year-ago reported figures. This Zacks Rank #2 company has a trailing four-quarter earnings surprise of 7.1%, on average.
Image Source: Zacks Investment Research
Build-A-Bear: Engaging Teens & Adults for Broader Appeal
Build-A-Bear operates as a multi-channel retailer of plush animals and related products. The company has successfully diversified its consumer base beyond children, tapping into the teen and adult segments. The company's focus on enhancing customer engagement through digital platforms and personalized experiences has strengthened brand loyalty, contributing to increased foot traffic and repeat purchases. Build-A-Bear's diverse product range, including themed and seasonal merchandise, resonates with consumers and helps capitalize on trending market demands. Strategic partnerships and collaborations, as well as a growing global presence through new store locations, amplify its revenue potential.
The Zacks Consensus Estimate for Build-A-Bear’s current financial-year revenues and EPS suggests growth of 1.2% and 8.8%, respectively, from the year-ago reported figure. BBW currently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
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Get Ahead This Holiday Season: 4 Retail Stocks to Invest In
Retailers are preparing for the holiday season with as much enthusiasm as shoppers looking for great deals. The season, which accounts for a sizable chunk of yearly revenues, is a make-or-break for retailers. Players in the industry are all geared up to walk the extra mile this festive season to capitalize on any potential upswing in demand. Decent job growth and steady wage gains should support consumer spending.
As inflation continues to ease, purchasing power is gradually improving, fueling spending activity. The recent 50-basis point interest rate cut by the Federal Reserve has boosted confidence in the retail sector. Players like Abercrombie & Fitch Co. (ANF - Free Report) , Burlington Stores, Inc. (BURL - Free Report) , Boot Barn Holdings, Inc. (BOOT - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) are poised to witness improved demand this season. The Mastercard Economics Institute forecast a favorable picture for the holiday season.
Holiday Shopping Forecast 2024: Trends and Insight
According to the Mastercard Economics Institute, U.S. retail sales, excluding automotive, are anticipated to increase by 3.2% between Nov. 1 and Dec. 24. This forecast reflects a slight improvement over the 3.1% increase witnessed last season. Per the report, online spending is expected to rise 7.1% year over year. With a proactive approach and customer-centric offerings, retailers will try to seize every opportunity the season presents.
Black Friday, which traditionally marks the beginning of the holiday season, is falling later this year on Nov. 29 compared with Nov. 24 last year. As a result, market pundits are anticipating that shoppers may delay their purchases, leading to a concentration of holiday spending in December.
Another significant trend is the expected surge in electronics sales, driven by the recent cut in interest rates. With borrowing costs reduced, consumers are likely to splurge on high-tech gadgets, sporting goods and personal care products. Prices in these categories have remained relatively stable since 2023, which may boost demand. The electronics segment, in particular, is projected to witness a sales increase of 6.7% year over year.
The growing preference for online shopping continues to shape the retail landscape, particularly in the apparel sector. Online apparel sales are expected to rise by 4.5%, while in-store sales in this category are projected to grow by a modest 2%. Jewelry, another key holiday gift category, is seeing a shift toward brands that cater to millennial and Gen Z shoppers.
Retailers to Leave No Stone Unturned This Holiday Season
The significance of the holiday season for retailers cannot be overstated. To make the most of the festive season and win over early-bird shoppers, retailers are likely to kickstart promotions earlier this year as well. The influx of enthusiastic shoppers provides retailers with the opportunity to showcase their products, boost revenues and strengthen brand loyalty.
Retailers are investing in creating fast, convenient and secure shopping experiences across both physical stores and online platforms. They are restocking shelves with high-demand products, enhancing their digital presence to improve product visibility and engaging customers through social channels. They are optimizing logistics for smooth operations, especially in light of the recent port strikes on the East and Gulf Coasts, which could potentially disrupt supply chains during the critical holiday season.
That said, we have highlighted four stocks from the Retail - Wholesale sector that look well-positioned based on their sound fundamentals.
Past-Year Stock Price Performance of ANF, BURL, BOOT & BBW
Image Source: Zacks Investment Research
4 Prominent Retail Stocks
Abercrombie & Fitch: Brand Visibility & Global Expansion
Abercrombie & Fitch stands out as a strong investment choice. The company excels in integrating digital and physical retail channels, offering a seamless shopping experience and driving higher customer satisfaction and loyalty. Strategic marketing initiatives, particularly targeted campaigns in key markets, have been effective in boosting brand visibility and customer acquisition. The introduction of innovative product lines meets specific customer needs and broadens the brand's appeal. Abercrombie & Fitch’s regional operating model, with a focus on the Americas, the EMEA (Europe, the Middle East and Africa) and the APAC (Asia-Pacific), provides a solid foundation for global expansion.
This leading, global, omnichannel specialty retailer of apparel and accessories for men, women and kids has a trailing four-quarter earnings surprise of 28%, on average. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share (EPS) suggests growth of 13.1% and 63.4% from the year-ago period. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Image Source: Zacks Investment Research
Burlington: Merchandising Enhancements & Store Productivity
Burlington Stores is a nationally recognized off-price retailer. The company has demonstrated a strong ability to adapt to consumer trends, which gives it a competitive edge in the retail landscape. By staying in tune with customer preferences and adjusting its product offerings, Burlington Stores is well-positioned to capture additional market share. The company has balanced promotions with regular price sales, appealing to budget-conscious shoppers while protecting margins. Its strategic initiatives, including enhancing merchandising capabilities and optimizing store operations, have supported revenue growth. With targeted store openings, relocations and real-time inventory management, Burlington has seized opportunities and improved store productivity.
The Zacks Consensus Estimate for Burlington Stores’ current financial-year sales and EPS suggests growth of 10.1% and 30.5%, respectively, from the year-ago reported figures. This Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 18.4%, on average.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Image Source: Zacks Investment Research
Boot Barn Holdings: A Diverse Product Portfolio
Boot Barn Holdings’ diverse product offerings, which include western wear, boots and outdoor apparel, align well with seasonal trends and attract a broader customer base. The company’s continued investment in enhancing the omnichannel shopping experience allows customers to transition seamlessly between online and physical stores. Targeted marketing campaigns designed to resonate with consumers, along with the introduction of exclusive product lines, distinguish Boot Barn from its competitors. Customer loyalty programs incentivize repeat purchases, while a recovering economy fosters increased consumer confidence and discretionary spending, creating an ideal environment for sales growth.
The Zacks Consensus Estimate for Boot Barn Holdings’ current financial-year sales and EPS suggests growth of 11.5% and 10.3%, respectively, from the year-ago reported figures. This Zacks Rank #2 company has a trailing four-quarter earnings surprise of 7.1%, on average.
Image Source: Zacks Investment Research
Build-A-Bear: Engaging Teens & Adults for Broader Appeal
Build-A-Bear operates as a multi-channel retailer of plush animals and related products. The company has successfully diversified its consumer base beyond children, tapping into the teen and adult segments. The company's focus on enhancing customer engagement through digital platforms and personalized experiences has strengthened brand loyalty, contributing to increased foot traffic and repeat purchases. Build-A-Bear's diverse product range, including themed and seasonal merchandise, resonates with consumers and helps capitalize on trending market demands. Strategic partnerships and collaborations, as well as a growing global presence through new store locations, amplify its revenue potential.
The Zacks Consensus Estimate for Build-A-Bear’s current financial-year revenues and EPS suggests growth of 1.2% and 8.8%, respectively, from the year-ago reported figure. BBW currently carries a Zacks Rank #2.
Image Source: Zacks Investment Research