Are These The Best Consumer Stocks To Invest In 2022?
While the uncertainty in the stock market today might have some searching for “shortable stocks”, consumer stocks could be worth looking at. After all, there are a vast array of businesses that cater to consumers. For the most part, these firms are spread across two key consumer segments. Firstly, we have the consumer staples industry that has and continues to produce day-to-day necessities for consumers. These consumer stocks could be go-to’s as investors consider more defensive stocks in the stock market now.
Secondly, there are also consumer discretionary stocks. Among this group of consumer stocks, you have industry leads like Alibaba (NYSE: BABA) and Apple (NASDAQ: AAPL) to consider. As such, investors would be spoilt for choices when it comes to investing in consumer stocks. Moreover, the latest job report from the Labor Department would indicate that the U.S. job market is holding strong despite recession fears. In essence, nonfarm payrolls are up by 372,000 throughout June 2022, handily topping Dow Jones economist forecasts of a 250,000 gain.
At the same time, consumer stocks such as General Mills (NYSE: GIS) and Bed Bath & Beyond (NASDAQ: BBBY) also continue to draw attention. On one hand, General Mills topped consensus Wall Street forecasts in its latest quarterly financial update last week. To highlight, its earnings per share of $1.12 is 11 cents above estimates. The company is raising its full-year profit outlook as well. On the other hand, recent mentions of insider trading are putting BBBY stock back on retail investors’ radars this week. All in all, consumer stocks remain as active as ever now. Could one of these three be worth keeping an eye on this week?
Consumer Stocks To Buy [Or Sell] Today
- Levi Strauss & Company (NYSE: LEVI)
- Kura Sushi USA Inc. (NASDAQ: KRUS)
- Spirit Airlines Inc. (NYSE: SAVE)
Levi Strauss & Company
First up, we have Levi Strauss. On the whole, most consumers and investors alike would be familiar with this titan in the apparel industry. Primarily, this would be thanks to the global popularity of its denim jeans. In brief, Levi is among the world’s largest brand-name apparel firms in the market. Alongside jeans, the company also designs and distributes casual wear among other accessories for consumers. Among its prominent brands are Levi’s, Signature, Denizen, and Dockers. For a sense of scale, the company’s products are available across over 110 countries worldwide.
More importantly, LEVI stock is gaining traction in the stock market today thanks to the company’s latest quarterly update. Overall, the company posted commendable figures in its second-quarter earnings call. According to the press release, Levi’s total revenue for the quarter is $1.47 billion. Also, the company’s quarterly earnings per share is $0.29. For reference, this is versus consensus Wall Street figures of $1.43 billion and $0.23 respectively. With the retailer topping consensus estimates during the current inflationary business environment, this would be a notable feat.
Commenting on Levi’s performance for the quarter is CEO Chip Bergh. He cites that these figures illustrate the effectiveness of Levi’s current business strategy. The likes of which “continues to support strong revenue growth and margin expansion.” By focusing on its growth drivers, Bergh notes that Levi is in a good position to sustain long-term growth. Furthermore, the company is also increasing its quarterly dividend by 20% to $0.12 per share. As Levi continues to fire on all cylinders, would LEVI stock be a top consumer stock in your opinion?
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Kura Sushi USA Inc.
Next, we have Kura Sushi, a consumer company that has a fast-growing, technology-enabled restaurant concept. It serves authentic Japanese cuisine and continues to create an exciting atmosphere that enables guests to control the variety, portioning, and pace of their dining experience. It offers its guests a small plates menu featuring over 140 freshly prepared items rooted in our philosophy of using old-world techniques and ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives.
On July 7, 2022, the company reported its third-quarter financials. Diving in, total sales for the quarter were $38 million, compared to $18.5 million a year earlier. Comparable restaurant sales increased 65% year-over-year as well. It also reported a net income of $0.5 million or $0.05 per diluted share. Hajime Uba, President and Chief Executive Officer of Kura Sushi, stated, “The strong sales momentum from the first half of our fiscal year continued into the third quarter, exemplified by comparable sales growth of 28.3% versus our pre-pandemic fiscal 2019 results and another record sales quarter for the company. Moreover, our team has done a tremendous job navigating ongoing inflationary pressures, resulting in a solid improvement in our restaurant-level profitability, both on a dollar and margin basis as compared to our pre-COVID period.”
For its full fiscal year outlook for 2022, the company expects a total sales between $137 million and $142 million. It also expects to open 8 new restaurants, with an average net capital expenditure per unit to be approximately $2.2 million. With that, should investors consider adding KRUS stock to their portfolios right now?
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Spirit Airlines Inc.
Spirit Airlines is a low-cost airline that commits to delivering the best value to fly. It is a leader in providing customizable travel options that starts with an unbundled fare. The company has been in the limelight recently on its merger talks with both Frontier Group (NASDAQ: ULCC) and rival suitor JetBlue (NASDAQ: JBLU).
In the last week of June, Spirit announced that it had signed a second amendment to its previously announced merger agreement with Frontier Group. In the press release dated June 24, 2022, the company says that under the terms, Frontier will increase its per-share consideration payable to Spirit shareholders to $4.13 in cash. Frontier will also increase its reverse termination fee to Spirit in the unlikely event that the combination is not consummated for antitrust reasons. However, Spirit Airlines has once again delayed its special shareholder meeting to vote on this planned merger to July 15.
The postponement comes as Spirit continues its talks with both Frontier and JetBlue. JetBlue CEO, Robin Hayes says they are encouraged by its discussions with Spirit and is hopeful that they believe that Spirit shareholders have leaned toward an agreement with JetBlue. This could, however, still change over the next week. Given the excitement surrounding Spirit Airlines, is SAVE stock a buy?
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