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Avoid Chinese Trade War Concerns with These 3 Retail Stocks
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The U.S. and China inched closer to a possible trade war after the Trump administration threatened to impose tariffs on $50 billion worth of Chinese imports on Tuesday night. The Chinese have since responded in kind, and investors are now seemingly more worried than ever about market-wide repercussions. But fashion based retail is one area of the U.S. economy that might be able to stay above the fray.
The Trump administration announced possible 25% tariffs across 1,300 categories and products, in a move that escalates recent tensions between the world’s two largest economies. Notably left off Trump’s latest tariff proposal are retail staples from shoes to clothing. This means that some U.S. retailers could avoid a trade war-induced downturn.
Clearly, most investors hope a compromise can be reached before competing Chinese and U.S. tariffs are imposed. But it never hurts to prepare for the worst.
With that said, let’s take a look at three shoe and clothing heavy retail stocks that might be able to come out of any possible trade war unscathed.
This department store chain operates around 300 stores around the U.S. and saw its comparable store sales climb by 3% last quarter. Dillard’s revenue growth amid the shifting retail market is notable, but the company’s ability to turn a profit going forward might excite investors even more.
Dillard’s has seen its first quarter consensus earnings estimate climb by $0.48 in the last 60 days, based on upward earnings estimate revision activity. Our current Zacks Consensus Estimates are now calling for Dillard’s earnings to surge by nearly 29% to reach $2.73 per share. This bottom line expansion is projected to continue for the rest of the year.
The retailer’s fashion-based business should also be able to keep running smoothly if a trade war were to break out. Lastly, Dillard’s is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” grade for Value and a “B” for Growth in our Style Scores system.
Burlington’s growth has been notable at a time when e-commerce has forced many brick-and-mortar retailers to close. The company posted strong comp sales growth last quarter and is projected to see its first quarter revenues climb by 10.7% to reach $1.49 billion.
Investors will also be happy to note that Burlington’s bottom line is expected to expand by 48% in Q1 to reach $1.08 per share. Looking even further ahead, the department store is projected to see its EPS figure grow at an annualized rate of 18.7% over the next three to five years.
Burlington is currently a Zacks Rank #2 (Buy) that has experienced a slew of Q1 and full-year earnings estimate revisions, with almost complete agreement to the upside, over the last 60 days. Furthermore, Trump’s new tariffs will try to avoid U.S. shopper backlash, which is great news for this footwear and clothing-focused off-price retailer.
Macy’s Forward P/E of 8.2 compares favorably to its industry’s 10.4 average and offers even better value than it did just a month ago due to the recent market-wide selloff. This industry bellwether has also traded at a substantial discount to the “Retail - Regional Department Stores” average for more than a year, as it fights its way back through a series of digital sales innovations.
Looking ahead, Macy’s Q1 earnings are projected to surge by 50% to hit $0.36 per share, while revenue is expected to climb at a more modest rate. Meanwhile, with a beta of 0.75, Macy’s is theoretically 25% less volatile than the market average, which is great for investors in search of stability amid this recent bearish turn.
Macy’s is currently a Zacks Rank #1 (Strong Buy) that has earned seven upward earnings estimate revisions for its full-year, all within the last 60 days. The retail giant is also far less likely to suffer tariff related business setbacks as these proposed tariffs take on goods such as dishwashers and televisions.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Avoid Chinese Trade War Concerns with These 3 Retail Stocks
The U.S. and China inched closer to a possible trade war after the Trump administration threatened to impose tariffs on $50 billion worth of Chinese imports on Tuesday night. The Chinese have since responded in kind, and investors are now seemingly more worried than ever about market-wide repercussions. But fashion based retail is one area of the U.S. economy that might be able to stay above the fray.
The Trump administration announced possible 25% tariffs across 1,300 categories and products, in a move that escalates recent tensions between the world’s two largest economies. Notably left off Trump’s latest tariff proposal are retail staples from shoes to clothing. This means that some U.S. retailers could avoid a trade war-induced downturn.
Clearly, most investors hope a compromise can be reached before competing Chinese and U.S. tariffs are imposed. But it never hurts to prepare for the worst.
With that said, let’s take a look at three shoe and clothing heavy retail stocks that might be able to come out of any possible trade war unscathed.
1. Dillard's (DDS - Free Report)
This department store chain operates around 300 stores around the U.S. and saw its comparable store sales climb by 3% last quarter. Dillard’s revenue growth amid the shifting retail market is notable, but the company’s ability to turn a profit going forward might excite investors even more.
Dillard’s has seen its first quarter consensus earnings estimate climb by $0.48 in the last 60 days, based on upward earnings estimate revision activity. Our current Zacks Consensus Estimates are now calling for Dillard’s earnings to surge by nearly 29% to reach $2.73 per share. This bottom line expansion is projected to continue for the rest of the year.
The retailer’s fashion-based business should also be able to keep running smoothly if a trade war were to break out. Lastly, Dillard’s is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” grade for Value and a “B” for Growth in our Style Scores system.
2. Burlington Stores (BURL - Free Report)
Burlington’s growth has been notable at a time when e-commerce has forced many brick-and-mortar retailers to close. The company posted strong comp sales growth last quarter and is projected to see its first quarter revenues climb by 10.7% to reach $1.49 billion.
Investors will also be happy to note that Burlington’s bottom line is expected to expand by 48% in Q1 to reach $1.08 per share. Looking even further ahead, the department store is projected to see its EPS figure grow at an annualized rate of 18.7% over the next three to five years.
Burlington is currently a Zacks Rank #2 (Buy) that has experienced a slew of Q1 and full-year earnings estimate revisions, with almost complete agreement to the upside, over the last 60 days. Furthermore, Trump’s new tariffs will try to avoid U.S. shopper backlash, which is great news for this footwear and clothing-focused off-price retailer.
3. Macy’s (M - Free Report)
Macy’s Forward P/E of 8.2 compares favorably to its industry’s 10.4 average and offers even better value than it did just a month ago due to the recent market-wide selloff. This industry bellwether has also traded at a substantial discount to the “Retail - Regional Department Stores” average for more than a year, as it fights its way back through a series of digital sales innovations.
Looking ahead, Macy’s Q1 earnings are projected to surge by 50% to hit $0.36 per share, while revenue is expected to climb at a more modest rate. Meanwhile, with a beta of 0.75, Macy’s is theoretically 25% less volatile than the market average, which is great for investors in search of stability amid this recent bearish turn.
Macy’s is currently a Zacks Rank #1 (Strong Buy) that has earned seven upward earnings estimate revisions for its full-year, all within the last 60 days. The retail giant is also far less likely to suffer tariff related business setbacks as these proposed tariffs take on goods such as dishwashers and televisions.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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