Do You Have These Top Retail Stocks On Your 2021 Watchlist?
Retail stocks are in for one last ride before the year ends. Despite losing their valuations as the pandemic wreaked havoc earlier this year, top retail stocks have since climbed their way back. By looking at the S&P Retail Select Industry Index, which focuses on the best retail stocks in the S&P 500, the index has been up by over 130% since the stock market crash in March. Things do seem to look promising as the industry gains momentum. Retail stocks are an interesting bunch after all. Despite the industry being severely affected this year, some retail stocks enjoyed explosive growth. Some notable examples include Lowe’s (LOW Stock Report) and Home Depot (HD Stock Report). Lowe’s share price has more than doubled since March.
Furthermore, President Donald Trump has just signed into law a COVID-19 relief and spending package bill yesterday. The relief bill will include a payment of $600 to Americans earning less than $75,000 a year. This would of course provide help to the millions of workers, families, and small businesses across the country who are desperately in need of money. Top that off with the holiday seasons, this quarter could potentially be one of the better quarters for the retail industry in general.
It is without a doubt that many people depend on the retail industry. If anything, the pandemic has shown how important it is that ordinary citizens get their daily necessities. Be it essential or consumer discretionary goods, there will always be demand for them. All things considered, will 2021 to be the year that top retail stocks to buy make a strong comeback?
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Top Retail Stocks To Buy [Or Avoid] This Week: Chewy Inc.
Chewy (CHWY Stock Report) is an online retailer of pet food and other pet-related products. The company is based in Florida and is one of the most trusted and convenient online destinations for pet owners everywhere. Chewy shares have enjoyed a 200% growth in share price year-to-date and are currently trading at $92.61 as of 4:00 p.m. ET. These are impressive figures to boast and the company seems well-positioned for 2021.
By looking at the company’s latest financial reports that were posted earlier this month, we will get a clearer picture of how the company is faring. Chewy reported net sales of $1.78 billion, a 45% increase year-over-year. Sales accelerated in October as customers responded favorably to Chewy’s expanded assortment and improved merchandising. The company also reports that it has 17.8 million active customers, representing a 39.8% increase compared to a year earlier. One notable feature that Chewy has over its competitors is its Autoship subscription. Since pet owners more or less know what their pet needs and how long supplies will last, setting up automatic shipments through Autoship makes sense. Customers also get 5% off in all deliveries, further increasing interest in pet owners.
The company expects to end the year on a high based on its fourth-quarter guidance. Chewy expects net sales of $1.94 billion to $1.96 billion. The company also believes that it can sustain this momentum going into 2021 based on its ability to retain its customers. In October, the company announced its telehealth service, Connect With A Vet, which allows pet owners to receive veterinarian care and support amidst the pandemic. With so many exciting developments for Chewy, will you consider buying CHWY stock?
Top Retail Stocks To Buy [Or Avoid] This Week: Kohl’s
Kohl’s (KSS Stock Report) is a department store retail chain. The company has over 1,100 locations and operates in every U.S. state except Hawaii. The company has also been listed on the S&P 500 since 1998. Kohl’s is also the second-largest department store chain in the U.S. by sales in 2019, lagging only to Macy’s (M Stock Report). Kohl shares are up by over 200% since March.
In the company’s third-quarter fiscal posted in November, Kohl’s sales and earnings exceeded company expectations, improving significantly from its second quarter. The company reported net sales of $3.779 billion for the quarter. Digital sales were a significant contributor this quarter and have increased by 25% year-over-year. Kohl’s also boasts a strong operating cash flow at $910 million year-to-date. In the company’s fourth-quarter outlook, Kohl’s says it is well-positioned and prepared to serve its customers with more omni-channel experiences in its repertoire. Kohl’s has been investing heavily in both its e-commerce and brick-and-mortar stores after all.
The company seems to have a powerful foundation to accelerate growth. With 65 million active customers and boasting over 600 million store visits, Kohl’s has the numbers to sustain its growth in the long run. The company also has a 24% digital sales penetration and 1.5 billion website visits per year. This company is certainly not pulling its punches in the retail arena. With that in mind, will you consider adding KSS stock to your portfolio?
Top Retail Stocks To Buy [Or Avoid] This Week: GameStop
GameStop (GME Stock Report) is a video game, consumer electronics, and gaming merchandise retailer. The Texas-based company operates over 5,500 retail stores across 10 countries. GameStop is also a Fortune 500 company and offers the best in the gaming industry. The company’s share price is up by over 40% in the last two weeks. It is up another 8% as at 10:10 a.m. ET.
Why is this happening? It seems that investors have responded positively to its recent third-quarter financial results. The company reports that its wide array of platforms have increased its global e-commerce sales by a mind-blowing 257%. GameStop also reports net sales of $1 billion, which blew investors’ expectations. This is because of the pandemic and impact of operating in the last few months of the seven-year-long current generation console cycle. Both Sony (SNE Stock Report) and Microsoft (MSFT Stock Report) have recently released their next-generation consoles, the PlayStation 5 and Xbox Series X/S. Could GameStop be poised for growth given how we are about to start a new console cycle?
Recently, it was revealed that major shareholder Ryan Cohen has increased his stake in the company. Cohen was the co-founder of Chewy and could be pulling the same tricks he used to make Chewy the successful company it is today. Cohen is also pushing for GameStop to transition from its brick-and-mortar retailer to increase its online presence. With Cohen’s track record of success, do you think GME stock is worth buying today?