Retail stocks have had a crazy time on the stock market this year. With the coronavirus pandemic disrupting and even completely halting some businesses, this is expected. However, many of the top retail stocks have shown resilience in these tough times. Most of them have done so via a mix of digital acceleration and business restructuring. This has benefitted the prepared as we can see that the top players have been gearing up for a busy holiday season. For example, the likes of Target (TGT Stock Report) and Amazon (AMZN Stock Report) are not only in the green but are having their best years in the stock market. Although the industry as a whole seems to be on the rise, investors may have even more reason to expand their retail stock portfolios this week.
Over the weekend, U.S. lawmakers reached a deal on a $900 billion economic stimulus package for the country. With the extra financial support from the government, it will definitely help to ease the financial commitments faced by the general public. As a result, we could be seeing a rise in holiday retail spending. Which in turn, could drive some of the best retail stocks to buy higher in the coming days and weeks. Regardless of how long it will take for the rollout of stimulus checks, the retail industry and its investors should be breathing a sigh of relief at the moment.
Despite all this positive news, seasoned investors are aware of the importance of sorting the wheat from the chaff during this kind of tailwind. Companies that are prepared for the flood of business will likely be able to reap the maximum benefits from the coming holiday season. In relation to that, here is a list of the top retail stocks to watch this week.
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First up, we will be looking at Five Below (FIVE Stock Report). Five Below is a Pennsylvania-based chain of specialty discount stores. It is famous for mostly selling products that cost up to $5. The company’s overall offerings are focused on younger consumers which admittedly would fit their spending power. Interestingly, FIVE stocks are up by over 200% since the stock market crash in March.
In its recent quarter fiscal reported earlier this month, the company raked in $476.6 million in net sales for the quarter. To investors’ delight, it also saw a 100% year-over-year rise in earnings per share. CEO Joel Anderson said, “Our performance this quarter demonstrates the inherent flexibility of our model and the agility of our teams to deliver a differentiated shopping experience with incredible value.” He continued, “The holiday selling season is off to an early and strong start, and COVID-related uncertainty notwithstanding, we believe we are well-positioned to delight our customers with amazing Wow stocking stuffers and gifts at incredible values.” Time will tell if the company can continue to wow investors through to 2021.
Just last week, Five Below announced a partnership with leading online grocery platform Instacart. The collaboration allows both companies to offer same-day delivery and curbside pickup from stores in select cities across the U.S. This is a fantastic play by Five Below as it makes its services even more convenient and available for a larger number of customers. With the holiday seasons inbound and the aforementioned stimulus package, it could be an interesting time for FIVE stock. Would you agree?Best Retail Stock To Watch This Week: Walmart Inc.
Next, we will be looking at Walmart (WMT Stock Report). This retail giant is a household name for many in the U.S. Its stock has seen consistent growth over the past six months with gains of over 19%. Despite being initially affected by the pandemic in March, WMT stocks appear to be having their best year on the stock market by far. Accordingly, it continues to make moves and build up momentum even with its current gains.
On December 15, the company announced its driverless delivery operations would be launching next year. This is a phenomenal announcement for Walmart as it places it at the forefront of the industry with its driverless freight initiative. In a time where social distancing is becoming a new norm, this will definitely smoothen its business moving forward. Additionally, the company also collaborated with video-sharing giant TikTok on December 17. It held a shoppable live stream event where users were able to shop for fashion items featured by their favorite creators on the platform. After which, the 80 million active users in the U.S. were given the option to make purchases via Walmart’s TikTok page. It appears that Walmart is firing on all cylinders this holiday season.
In November, the company reported stellar results in its third-quarter fiscal. Walmart raked in over $134 billion in total revenue for the quarter. Notably, its shift towards e-commerce seems to have benefitted the company as its revenues in that segment soared 79% year-over-year. Walmart’s recent investments are clearly focused on bolstering its e-commerce services. Investors will definitely be looking at WMT stock closely this retail season. How about you?Best Retail Stock To Watch This Week: Bed Bath & Beyond Inc.
Finally, we have Bed Bath & Beyond (BBBY Stock Report). Its key products include the merchandise in the home, baby, beauty, and wellness markets. It is no wonder then that consumers looking to make their homes more comfortable amidst the pandemic are flocking to its stores. We can see this trend reflected in BBBY stock prices which have skyrocketed by over 400% since early April. This is all good, but investors may be wondering if it still has room to grow going into 2021.
Just last week, Bed Bath & Beyond finalized its decision to sell a non-core banner, Cost Plus World Market. CEO Mark Trittion said, “we have also meaningfully reduced our lease liability and overall debt. These actions provide greater financial flexibility to support our digital-first, Omni-always transformation, and our commitment to deliver sustainable total shareholder return.” Even amidst its current success, Bed Bath & Beyond still finds ways to further streamline its operations. On top of that, it is currently offering massive deals on a wide array of items ranging from Roomba’s to Smart Home appliances. In fact, the company is even offering same-day delivery for certain items ordered by 4 p.m. on December 24. It appears to be kicking into high gear at the right time.
Bed Bath & Beyond also ended its recent quarter with considerable funds. In its second-quarter fiscal released in October, the company gained $2.69 billion in total revenue. On top of that, it ended the quarter with a 46% year-over-year increase in cash on hand. All things considered, Bed Bath & Beyond appears to be prepping for 2021. Do you think BBBY stock deserves a spot on your watchlist?