U.S. holiday retail sales have increased at their best pace in six years, according to preliminary data. Total U.S. retail sales jumped 5.1% from Nov 1 through Dec 24 from the year-ago period. This definitely has been turning out to be a great year for retailers, with six more days still to go for the New Year.
Earlier, the National Retail Federation (NRF) had predicted that retail sales during the holiday season are expected to reach around $721 billion. Understandably, an increasing number of Americans have been spending more this holiday season, which has been benefiting retailers.
At the same time, it also proves the strength in the U.S. economy amid growing concerns of slowing global economic growth. Given this scenario, investing in retail stocks looks like a profitable option.
Holiday Retail Sales Jump
Holiday retail sales grew at it fastest pace in the last six years, according to early data. Excluding automobiles, holiday retail sales grew 5.1% between Nov 1 and Dec 24 compared with the year-ago period, per Mastercard SpendingPulse, which tracks both online and in-store spending with all forms of payment.
Per the report, shoppers spent more than $850 billion this holiday season. Given that Christmas Eve fell on Monday, retailers benefited from the last-minute push from shoppers, who were counting on the final weekend to complete their gift-buying.
The jump was driven by robust online spending. Online sales have been helping retailers this holiday season. Online sales grew 26.4% from a year earlier between the Wednesday before Thanksgiving through Black Friday, per Adobe Analytics. Per Mastercard SpendingPulse, U.S. e-commerce sales grew 18.1% from Nov 1 through Dec 19 on a year-over-year basis.
Retail Sales Grow in November
Per the Commerce Department, U.S. retail sales grew 0.2% in November driven by robust holiday shopping and a drop in gasoline prices. Excluding gas, retail sales in November rose 0.5%. Retail sales have jumped a robust 5.3% in 2018, which proves the strength in the U.S. economy.
Moreover, non-store sales, which include online sales, jumped 2.3% in November. Understandably, an increasing number of Americans are spending more on shopping, which indicates that they have more faith in the economy, with unemployment hitting a record low.
Our Choices
It goes without saying that an increasing number of Americans are willing to spend more on shopping. This has been steadily helping U.S. retailers, who have witnessed a robust year so far. At the same time, it also proves the underlying strength in the country’s economy despite a stock market swoon and a partial government shutdown.
Given this scenario, this is an opportune time to invest in retail stocks. However, picking winning stocks may be difficult. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.
Fossil Group, Inc. FOSL is involved in designing, marketing and distribution of consumer fashion accessories.
Fossil holds a Zacks Rank #1 (Strong Buy). The company has expected earnings growth of more than 100% for the current year. The Zacks Consensus Estimate for the current year has improved 32.1% over the last 60 days.
Abercrombie & Fitch Co. ANF through its subsidiaries, operates as a specialty retailer. The company operates in two segments, Hollister and Abercrombie.
The company has expected earnings growth of 40% for the current year. The Zacks Consensus Estimate for the current year has improved 21.3% over the last 60 days. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shoe Carnival, Inc. SCVL offers a broad assortment of moderately priced dress, casual and athletic footwear for men, women and children with emphasis on national and regional name brands.
Shoe Carnival sports a Zacks Rank #1. The company has expected earnings growth of 59.7% for the current year. The Zacks Consensus Estimate for the current year has improved 10.2% over the last 60 days.
Canada Goose Holdings Inc. GOOS is a designer, manufacturer, distributor and retailer of premium outerwear for men, women and children.
Canada Goose has a Zacks Rank #2 (Buy). The company has expected earnings growth of 43.9% for the current year. The Zacks Consensus Estimate for the current year has improved 10.5% over the last 60 days.
Nordstrom, Inc. JWN is a leading fashion specialty retailer offering compelling clothing, shoes and accessories for men, women and children.
Nordstrom carries a Zacks Rank #2. The company has expected earnings growth of 21.6% for the current year. The Zacks Consensus Estimate for the current year has improved 0.8% over the last 60 days.
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