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November Sales Signal Stellar Holiday Season: 4 Retail Stocks to Buy
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November’s retail sales growth has given retailers a reason to cheer as the holiday shopping season reaches its epitome. The Commerce Department reported a 0.7% increase in sales, following October's upwardly revised reading of 0.5%. Retail sales, which reached an impressive $724.6 billion, highlight the underlying economic strength and showcase strong consumer spending on motor vehicles and online merchandise.
A resilient labor market, steady wage gains and solid household finances fueled consumer spending activity. November's stellar performance came despite Cyber Monday being moved into December due to late Thanksgiving. This reflects robust consumer participation and a promising start to the shopping season. Compared to the last year, November's retail sales were up 3.8%.
Early signs from the holiday shopping season suggest a positive outlook for the retail sector, thanks to easing inflation and improving purchasing power. The recent rate cut by the Federal Reserve has also bolstered consumer confidence. As Americans stepped up spending, retailers such as Abercrombie & Fitch Co. (ANF - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) , The Gap, Inc. (GAP - Free Report) and Amazon.com, Inc. (AMZN - Free Report) are well-positioned to tap the holiday demand.
Breaking Down Retail Sales Numbers
Sales at motor vehicle & parts dealers saw a month-on-month increase of 2.6%. Both furniture & home furnishing stores and electronics & appliance outlets experienced a 0.3% rise. Building material, garden equipment & supplies dealers registered 0.4% growth.
Sales at sporting goods, hobbies, musical instruments & bookstores rose by 0.9%, while receipts at gasoline stations increased by 0.1%. Non-store retailers, primarily online, reported a 1.8% jump. Sales at health & personal care stores remained unchanged.
On the contrary, sales at food & beverage stores and miscellaneous stores fell by 0.2% and 3.5%, respectively. Clothing & clothing accessories stores witnessed a decline of 0.2%. General merchandise stores experienced a 0.1% drop in sales, while food services & drinking places saw a 0.4% decrease.
Past-Year Stock Price Performance of ANF, DECK, GAP & AMZN
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.
This leading, global, omnichannel specialty retailer of apparel and accessories for men, women and kids has a trailing four-quarter earnings surprise of 14.8%, on average. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share (EPS) suggests growth of 14.9% and 69% 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.
Deckers' emphasis on expanding its brand presence and enhancing direct-to-consumer channels has been instrumental in driving sales. Coupled with a strong commitment to product innovation and a strategic push into international markets, particularly in the Asia-Pacific region, DECK is well-positioned for sustained growth. By focusing on premium products and full-price offerings for flagship brands like HOKA and UGG, Deckers continues to execute a winning strategy in a highly competitive market.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS suggests growth of 13.6% and 12.8%, respectively, from the year-ago reported figures. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 41.1%, on average.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Gap: Redefining Product Offerings
Gap is well-poised for growth as it embraces a multifaceted approach to elevate its brand presence and enhance customer loyalty. By prioritizing product innovation and leveraging consumer insights, the company is redefining its offerings to align more closely with evolving consumer preferences. Its investment in technology and digital channels aims to create a seamless shopping experience that caters to the growing demand for convenience and personalization. Moreover, the emphasis on operational effectiveness and accountability fosters a disciplined approach to inventory and expense management, supporting profitability.
The Zacks Consensus Estimate for Gap’s current financial-year sales and EPS suggests growth of 0.8% and 41.3%, respectively, from the year-ago reported figures. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 101.2%, on average.
Amazon: Dominating With Robust Logistics Network
Amazon is also worth considering. The company’s robust e-commerce platform, renowned for its vast product selection and efficient delivery services, continues to be a primary driver of revenue growth. Prime membership, a cornerstone of Amazon's success, not only fosters customer loyalty but also drives recurring revenues through subscription fees, offering members exclusive access to a myriad of services, such as expedited shipping.
The Zacks Consensus Estimate for Amazon’s current financial-year sales and EPS suggests growth of 10.9% and 79%, respectively, from the year-ago reported figure. AMZN, which carries a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 25.9%, on average.
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November Sales Signal Stellar Holiday Season: 4 Retail Stocks to Buy
November’s retail sales growth has given retailers a reason to cheer as the holiday shopping season reaches its epitome. The Commerce Department reported a 0.7% increase in sales, following October's upwardly revised reading of 0.5%. Retail sales, which reached an impressive $724.6 billion, highlight the underlying economic strength and showcase strong consumer spending on motor vehicles and online merchandise.
A resilient labor market, steady wage gains and solid household finances fueled consumer spending activity. November's stellar performance came despite Cyber Monday being moved into December due to late Thanksgiving. This reflects robust consumer participation and a promising start to the shopping season. Compared to the last year, November's retail sales were up 3.8%.
Early signs from the holiday shopping season suggest a positive outlook for the retail sector, thanks to easing inflation and improving purchasing power. The recent rate cut by the Federal Reserve has also bolstered consumer confidence. As Americans stepped up spending, retailers such as Abercrombie & Fitch Co. (ANF - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) , The Gap, Inc. (GAP - Free Report) and Amazon.com, Inc. (AMZN - Free Report) are well-positioned to tap the holiday demand.
Breaking Down Retail Sales Numbers
Sales at motor vehicle & parts dealers saw a month-on-month increase of 2.6%. Both furniture & home furnishing stores and electronics & appliance outlets experienced a 0.3% rise. Building material, garden equipment & supplies dealers registered 0.4% growth.
Sales at sporting goods, hobbies, musical instruments & bookstores rose by 0.9%, while receipts at gasoline stations increased by 0.1%. Non-store retailers, primarily online, reported a 1.8% jump. Sales at health & personal care stores remained unchanged.
On the contrary, sales at food & beverage stores and miscellaneous stores fell by 0.2% and 3.5%, respectively. Clothing & clothing accessories stores witnessed a decline of 0.2%. General merchandise stores experienced a 0.1% drop in sales, while food services & drinking places saw a 0.4% decrease.
Past-Year Stock Price Performance of ANF, DECK, GAP & AMZN
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.
This leading, global, omnichannel specialty retailer of apparel and accessories for men, women and kids has a trailing four-quarter earnings surprise of 14.8%, on average. The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and earnings per share (EPS) suggests growth of 14.9% and 69% 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.
Deckers: HOKA's Success & UGG's Popularity Boost Portfolio
Deckers' emphasis on expanding its brand presence and enhancing direct-to-consumer channels has been instrumental in driving sales. Coupled with a strong commitment to product innovation and a strategic push into international markets, particularly in the Asia-Pacific region, DECK is well-positioned for sustained growth. By focusing on premium products and full-price offerings for flagship brands like HOKA and UGG, Deckers continues to execute a winning strategy in a highly competitive market.
The Zacks Consensus Estimate for Deckers’ current financial-year sales and EPS suggests growth of 13.6% and 12.8%, respectively, from the year-ago reported figures. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 41.1%, on average.
See the Zacks Earnings Calendar to stay ahead of market-making news.
Gap: Redefining Product Offerings
Gap is well-poised for growth as it embraces a multifaceted approach to elevate its brand presence and enhance customer loyalty. By prioritizing product innovation and leveraging consumer insights, the company is redefining its offerings to align more closely with evolving consumer preferences. Its investment in technology and digital channels aims to create a seamless shopping experience that caters to the growing demand for convenience and personalization. Moreover, the emphasis on operational effectiveness and accountability fosters a disciplined approach to inventory and expense management, supporting profitability.
The Zacks Consensus Estimate for Gap’s current financial-year sales and EPS suggests growth of 0.8% and 41.3%, respectively, from the year-ago reported figures. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 101.2%, on average.
Amazon: Dominating With Robust Logistics Network
Amazon is also worth considering. The company’s robust e-commerce platform, renowned for its vast product selection and efficient delivery services, continues to be a primary driver of revenue growth. Prime membership, a cornerstone of Amazon's success, not only fosters customer loyalty but also drives recurring revenues through subscription fees, offering members exclusive access to a myriad of services, such as expedited shipping.
The Zacks Consensus Estimate for Amazon’s current financial-year sales and EPS suggests growth of 10.9% and 79%, respectively, from the year-ago reported figure. AMZN, which carries a Zacks Rank #2 (Buy), has a trailing four-quarter earnings surprise of 25.9%, on average.