Top Retail Stocks To Buy Or Sell With The Holiday Season Around The Corner
As a whole, retail stocks have performed poorly in 2020 due to coronavirus pandemic. But this does not imply that they all are. Companies likes Walmart (WMT Stock Report) and Costco (COST Stock Report) were able to beat this by staying open and selling essential goods throughout the pandemic. But traditional retail on the other hand, struggled. This includes companies that sell electronics, clothing, sportswear, and more at retail locations. Some companies were able to maintain a stream of revenue through e-commerce, while others were destroyed by the effects of the pandemic.
Reopening is very prominent at the moment, which is resulting in many beaten-down retail stocks rising back up in stock price. Many top retail stocks to watch have fully recovered as well, which means that this industry is starting to make a potential come back. It can be confusing to know which retail stocks to invest in though. That is why it is important to stay up to date on current news and earnings from these companies. Let’s take a look at three retail stocks that have been trending in the stock market as we approach the holiday season.
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Top Retail Stocks To Watch In Q4 2020: The Gap Inc.
The first company on this list of retail stocks to watch is The Gap Inc. (GPS Stock Report). The Gap is a retail company that produces and sells its clothes in a variety of retail locations. It actively operates more than 3,727 stores all around the world. GPS stock experienced an uptick a few months ago due to an announced collaboration with Kanye West. This collaboration was for Kanye to produce Yeezy clothing for the retail giant. Yeezy is a multi-billion-dollar company with very high sales, so it had a rather positive effect on The Gap. So where does GPS stock price stand now? After that deal, it reached $14.20 a share on average. So let’s look at where GPS stock is now and how this retail company is performing in November.
As of November 12th, GPS stock price has reached $21.73 a share on average. Last month the company announced its three-year “Power Plan 2023” to reach 80% of its addressable market through the company’s diversified omnichannel program. Its plan is to grow Old Navy to a $10 billion brand, reinvent the Banana Republic, double its Athleta sales.
These targets are a part of the company revamping, and expanding its other brands Old Navy and Athleta. It wants these two brands to make up 70% of its sales rather than the current 55%. It also stated that it expects operating cash flow reaching 10% of sales and its earnings margin before interest and tax at 10% or more, in just three years. So that is why The Gap Inc. is trending, and GPS stock has experienced a large uptick on this day. Profitable growth will be great for the company if it comes through on its expectations.
Top Retail Stocks To Watch In Q4 2020: Macy’s Inc.
Next up on this list of retail stocks to watch is Macy’s Inc. (M Stock Report). Macy’s is a retail giant that has more than 552 locations in the world. It sells items such as clothing through its massive department stores. Macy’s is currently at number 118 on the Fortune 500 list of companies. It has stores in many shopping malls in the United States as well. Well, like most other traditional retail stocks, M stock has been in some trouble this year. So why is M stock on our list of top retail stocks to watch amid the holiday season? Well, let’s dive into the recent news from this retail company and see exactly why it is trending.
Macy’s stock is up over 16% a share month-to-date. During November 12th’s trading session the stock closed at $6.99. Well, why the jump this month? Aside from the positive COVID-19 vaccine news, the positive outlook from companies like Gap for the future of retail has caused many other retail stocks to rebound lately. Back in September, the company released its second-quarter results for 2020. Its comparable sales were down 34.7%, but digital sales grew 53% during the quarter. It lost $431 in net income, and its net sales were about $3.5 billion, much lower than $5.5 billion the previous year.
The CEO of the company, Jeff Gennette said, “We are encouraged by our second-quarter performance; however, we continue to approach the back half of the year conservatively. Our immediate priority is successfully executing Holiday 2020.”
It will be interesting to see how the company performs this holiday season and if it will have a grand effect on M stock price. But that is why M stock has made this list of retail stocks to watch in November.
Top Retail Stocks To Watch In Q4 2020: Nordstrom Inc.
The final company on this list of retail stocks to watch is Nordstrom Inc. (JWN Stock Report). Nordstrom is a retail company that focuses on selling luxury goods such as clothing, shoes, jewelry, perfume, cosmetics, and more. The company’s massive closures have caused JWN stock to tank throughout the year. But could this be a turnaround point for this retail stock? Why is Nordstrom trending in the market right now? Let’s answer these questions right now.
The recent positive vaccine news reported by Pfizer (PFE Stock Report) has been encouraging for the entire retail sector as we approach the holiday season. Nordstrom is also using its Nordstrom Rack business as a fulfillment hub to help grow the company despite the pandemic going on.
Customers will now have items from Nordstrom.com shipped to Rack locations for pickup locally. This will allow the company to quickly move inventory between stores and distribution centers, allowing for next day pickup at many locations around the world. This will help e-commerce grow, and allow for a save in cost shipping items to its own locations rather than people’s homes. JWN closed at $15.69 a share as of the November 12th trading session. Only time will tell if this will be effective, but this is essentially why JWN stock is trending.