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Tenet Healthcare and Dollar General have been highlighted as Zacks Bull and Bear of the Day
Read MoreHide Full Article
For Immediate Release
Chicago, IL – October 3, 2024 – Zacks Equity Research shares Tenet Healthcare (THC - Free Report) as the Bull of the Day and Dollar General (DG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abercrombie & Fitch Co. (ANF - Free Report) , Burlington Stores, Inc. (BURL - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) .
Tenet Healthcare, a Zacks Rank #1 (Strong Buy), operates as a diversified health care services company in the United States. Shares of the health care provider are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this top-ranked stock.
THC stock is part of the Zacks Medical – Hospital industry group, which currently ranks in the top 1% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months, just as it has consistently throughout the year.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Tenet Healthcare (THC - Free Report) owns and operates general hospitals and health care facilities. Its hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies.
The company also provides intensive and critical care, along with services related to a variety of diseases such as cardiovascular, digestive, and musculoskeletal. Furthermore, Tenet Healthcare boasts one of the largest investor-owned health care delivery services.
The hospital owner’s revenue growth is fueled by increasing patient admissions, emergency room visits, and surgeries. A strategy of acquisitions and alliances aims to bolster the scale of its business through inorganic growth.
Earnings Trends and Future Estimates
The top-ranked company has put together an impressive earnings history, surpassing earnings estimates in each of the past eighteen consecutive quarters. Back in July, Tenet Healthcare reported second-quarter earnings of $2.31/share, a 22.2% surprise over the $1.89/share consensus estimate.
The health care giant has delivered a trailing four-quarter average earnings surprise of 58.5%. Consistently beating earnings estimates is a recipe for success and bolsters the bullish case.
THC shares received a boost as analysts covering the company have been increasing their third-quarter earnings estimates lately. For the current quarter, earnings estimates have risen 10.95% in the past 60 days. The Q3 Zacks Consensus EPS Estimate now stands at $2.33/share, reflecting a potential growth rate of 61.8% relative to the year-ago period.
Let’s Get Technical
THC stock has advanced more than 115% this year alone. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Only stocks that are in extremely powerful uptrends are able to witness this type of price move. THC shares broke out to a series of 52-week highs this year, even in the late-July period while the general market pulled back. Stocks that hold up well through periods of volatility tend to lead the next leg higher.
The stock has been widely outperforming the major indices, indicating a prolonged period of relative strength. With both strong fundamental and technical indicators, THC stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Tenet Healthcare has recently witnessed positive revisions. As long as this trend remains intact (and THC continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
THC stock is ranked favorably by our Zacks Style Scores, with top ‘A’ marks in our Value and Momentum categories. This indicates that the stock is likely to move higher based on promising earnings and price momentum metrics, in addition to favorable valuation characteristics.
Backed by a top industry group and an impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.
Dollar General, one of the largest and well-known discount retailers, provides various merchandise in the southern, midwestern and eastern United States. The company offers consumable products such as packaged foods and snacks, perishables like eggs and bread, and alcohol including beer and wine.
In addition, Dollar General provides cleaning products such as paper towels, storage bags, disinfectants, and laundry products. Based in Tennessee, the discount retailer also supplies apparel, seasonal offerings, health and beauty products, and over-the-counter medicines.
The stock has been struggling after Citi analysts recently downgraded shares and trimmed their price target, noting a challenging operating environment over the past several years. With retail giant Walmart strengthening its market position and product delivery options, a recovery for Dollar General is looking increasingly unlikely.
The Zacks Rundown
Dollar General, a Zacks Rank #5 (Strong Sell) stock, is a component of the Zacks Retail – Discount Stores industry group, which currently ranks in the bottom 16% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months.
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Along with many other retail stocks, DG shares have been underperforming this year while the general market returned to new heights. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head into the fourth quarter.
Recent Earnings Misses & Deteriorating Outlook
Dollar General has fallen short of earnings estimates in three of the past six quarters. Back in August, the company reported second-quarter earnings of $1.70/share, missing the $1.79/share Zacks Consensus estimate by -5%. Consistently falling short of earnings estimates is a recipe for underperformance, and DG is no exception.
The discount retailer has acknowledged recent challenges in its gross margin, which has primarily occurred due to shrink and markdowns, a greater consumable sales mix, and lower inventory markups. Rising selling, general, and administrative (SG&A) expenses are also a concern.
Dollar General has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -36.18% in the past 60 days. The Q3 Zacks Consensus EPS Estimate is now $0.97/share, reflecting negative growth of -23% relative to the year-ago period.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, DG stock is in a sustained downtrend. Notice how the stock has made a series of lower lows, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day average (red line) moving averages – another good sign for the bears.
DG stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. The stock would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. Shares have fallen nearly 40% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that DG is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of DG until the situation shows major signs of improvement.
Additional content:
Get Ahead of the Holiday Season: 3 Retail Stocks to Buy Now
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., Burlington Stores, Inc. and Build-A-Bear Workshop, Inc. 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 three stocks from the Retail - Wholesale sector that look well-positioned based on their sound fundamentals.
3 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.
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.
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.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Tenet Healthcare and Dollar General have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 3, 2024 – Zacks Equity Research shares Tenet Healthcare (THC - Free Report) as the Bull of the Day and Dollar General (DG - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Abercrombie & Fitch Co. (ANF - Free Report) , Burlington Stores, Inc. (BURL - Free Report) and Build-A-Bear Workshop, Inc. (BBW - Free Report) .
Here is a synopsis of all five stocks.
Bull of the Day:
Tenet Healthcare, a Zacks Rank #1 (Strong Buy), operates as a diversified health care services company in the United States. Shares of the health care provider are widely outperforming the market this year with the backing of a leading industry group. The stock is hitting a series of 52-week highs and displaying relative strength as buying pressure accumulates in this top-ranked stock.
THC stock is part of the Zacks Medical – Hospital industry group, which currently ranks in the top 1% out of more than 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months, just as it has consistently throughout the year.
Historical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our stock-picking success.
Company Description
Tenet Healthcare (THC - Free Report) owns and operates general hospitals and health care facilities. Its hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies.
The company also provides intensive and critical care, along with services related to a variety of diseases such as cardiovascular, digestive, and musculoskeletal. Furthermore, Tenet Healthcare boasts one of the largest investor-owned health care delivery services.
The hospital owner’s revenue growth is fueled by increasing patient admissions, emergency room visits, and surgeries. A strategy of acquisitions and alliances aims to bolster the scale of its business through inorganic growth.
Earnings Trends and Future Estimates
The top-ranked company has put together an impressive earnings history, surpassing earnings estimates in each of the past eighteen consecutive quarters. Back in July, Tenet Healthcare reported second-quarter earnings of $2.31/share, a 22.2% surprise over the $1.89/share consensus estimate.
The health care giant has delivered a trailing four-quarter average earnings surprise of 58.5%. Consistently beating earnings estimates is a recipe for success and bolsters the bullish case.
THC shares received a boost as analysts covering the company have been increasing their third-quarter earnings estimates lately. For the current quarter, earnings estimates have risen 10.95% in the past 60 days. The Q3 Zacks Consensus EPS Estimate now stands at $2.33/share, reflecting a potential growth rate of 61.8% relative to the year-ago period.
Let’s Get Technical
THC stock has advanced more than 115% this year alone. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.
Only stocks that are in extremely powerful uptrends are able to witness this type of price move. THC shares broke out to a series of 52-week highs this year, even in the late-July period while the general market pulled back. Stocks that hold up well through periods of volatility tend to lead the next leg higher.
The stock has been widely outperforming the major indices, indicating a prolonged period of relative strength. With both strong fundamental and technical indicators, THC stock is poised to continue its outperformance.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Tenet Healthcare has recently witnessed positive revisions. As long as this trend remains intact (and THC continues to deliver earnings beats), the stock will likely continue its bullish run into the end of this year and beyond.
Bottom Line
THC stock is ranked favorably by our Zacks Style Scores, with top ‘A’ marks in our Value and Momentum categories. This indicates that the stock is likely to move higher based on promising earnings and price momentum metrics, in addition to favorable valuation characteristics.
Backed by a top industry group and an impressive history of earnings beats, it’s not difficult to see why this company is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix. The future looks bright for this highly-ranked, leading stock.
Bear of the Day:
Dollar General, one of the largest and well-known discount retailers, provides various merchandise in the southern, midwestern and eastern United States. The company offers consumable products such as packaged foods and snacks, perishables like eggs and bread, and alcohol including beer and wine.
In addition, Dollar General provides cleaning products such as paper towels, storage bags, disinfectants, and laundry products. Based in Tennessee, the discount retailer also supplies apparel, seasonal offerings, health and beauty products, and over-the-counter medicines.
The stock has been struggling after Citi analysts recently downgraded shares and trimmed their price target, noting a challenging operating environment over the past several years. With retail giant Walmart strengthening its market position and product delivery options, a recovery for Dollar General is looking increasingly unlikely.
The Zacks Rundown
Dollar General, a Zacks Rank #5 (Strong Sell) stock, is a component of the Zacks Retail – Discount Stores industry group, which currently ranks in the bottom 16% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months.
Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.
Along with many other retail stocks, DG shares have been underperforming this year while the general market returned to new heights. The stock is hitting a series of lower lows and represents a compelling short opportunity as we head into the fourth quarter.
Recent Earnings Misses & Deteriorating Outlook
Dollar General has fallen short of earnings estimates in three of the past six quarters. Back in August, the company reported second-quarter earnings of $1.70/share, missing the $1.79/share Zacks Consensus estimate by -5%. Consistently falling short of earnings estimates is a recipe for underperformance, and DG is no exception.
The discount retailer has acknowledged recent challenges in its gross margin, which has primarily occurred due to shrink and markdowns, a greater consumable sales mix, and lower inventory markups. Rising selling, general, and administrative (SG&A) expenses are also a concern.
Dollar General has been on the receiving end of negative earnings estimate revisions as of late. Looking at the current quarter, analysts have slashed estimates by -36.18% in the past 60 days. The Q3 Zacks Consensus EPS Estimate is now $0.97/share, reflecting negative growth of -23% relative to the year-ago period.
Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.
Technical Outlook
As illustrated below, DG stock is in a sustained downtrend. Notice how the stock has made a series of lower lows, widely underperforming the major indices. Also note that shares are trading below downward-sloping 50-day (blue line) and 200-day average (red line) moving averages – another good sign for the bears.
DG stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average crosses below its 200-day moving average. The stock would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. Shares have fallen nearly 40% this year alone.
Final Thoughts
A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that DG is included in one of the worst-performing industry groups provides yet another headwind to a long list of concerns. A history of earnings misses and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.
Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of DG until the situation shows major signs of improvement.
Additional content:
Get Ahead of the Holiday Season: 3 Retail Stocks to Buy Now
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., Burlington Stores, Inc. and Build-A-Bear Workshop, Inc. 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 three stocks from the Retail - Wholesale sector that look well-positioned based on their sound fundamentals.
3 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.
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.
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.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index.Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.