Are These The Best Retail Stocks To Invest In Now?
This week, retail stocks are making waves again amidst earnings season. Most of the top retail stocks are seeing gains as holiday sales figures continue to wow investors. Of course, this would be the case as conventional retail businesses have mostly refined their e-commerce infrastructures by now. Take Macy’s (NYSE: M) and Amazon (NASDAQ: AMZN) for example. Macy’s reported its fourth-quarter fiscal earlier this week and exceeded sales estimates across its core businesses. At the same time, e-commerce giant Amazon reported total revenue of $125.55 billion in its recent fiscal quarter. After looking at the figures, it is safe to say that the industry is on the uptrend. Given the current state of the world, could the industry continue its current run?
Well, two key tailwinds could make that a yes. Firstly, House Democrats are looking to pass a $1.9 trillion stimulus package today. Subsequently, it would then advance towards President Joe Biden’s desk for approval. With consumers receiving an additional $1,400 to spend, the retail industry could be looking at another productive quarter ahead. Beyond that, nationwide inoculation efforts continue to ramp up as well. Ideally, as the economy continues to reopen, the retail industry will likely follow suit. Given all of this, I wouldn’t be surprised if investors are looking for the best retail stocks to buy now. If you are one of them, here are four to consider.
Top Retail Stocks To Buy [Or Sell] Now
- Revolve Group Inc. (NYSE: RVLV)
- Vipshop Holdings (NYSE: VIPS)
- L Brands Inc. (NYSE: LB)
- Best Buy Company Inc. (NYSE: BBY)
Revolve Group Inc.
Revolve is a California-based next-generation fashion retailer for millennial and Generation Z consumers. The likes of which would naturally be attracted to a premium lifestyle brand such as Revolve. Accordingly, its platform has become a go-to online source for fashion discovery and inspiration for younger audiences amidst the pandemic. We can see this as RVLV stock is looking at gains of over 400% since the pandemic first hit last March. In fact, it hit a new all-time high during intraday trading yesterday after posting its fourth-quarter fiscal.
In it, Revolve brought in total revenue of $140.75 million for the quarter. On top of that, the company also saw a 116% year-over-year surge in its earnings per share. Overall, the company saw a highly profitable quarter which capped a year of record net income and cash flow generation. This does speak to the resilience of Revolve even as it navigates these trying times for the apparel industry.
In the long run, Co-CEO Mike Karanikolas is confident that Revolve can make the most of its solid cash position in 2021. I could see businesses ramp up as younger consumers would have more incentive to accessorize and dress up post-pandemic. By and large, do you think this makes RVLV stock worth investing in right now?
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Another retail player in focus now would be Vipshop. The Chinese company operates an e-commerce website, VIP.com. In particular, it offers consumers high-quality and popular branded items at a significant discount from retail prices. With a strong foundation in e-commerce and attractive offerings, it comes as no surprise that Vipshop is on investors’ radars now. To this end, VIPS stock is currently up by over 180% in the past year. Specifically, it surged to a new all-time high just before yesterday’s closing bell. This does coincide with its latest earnings release.
Earlier on Thursday, the company saw green across the board in its fourth-quarter fiscal. To begin with, Vipshop reported total revenue of $5.5 billion for the quarter. This adds up to a 22% year-over-year bump. Additionally, the company saw gross merchandise value increase by over 25% over the same period, equaling $9.16 billion in the quarter.
CEO Eric Shen cites a 37% year-over-year growth in active customers as a key factor of Vipshop’s performance this quarter. Looking ahead, Shen also stated that the company will continue focusing on its merchandising strategy and big data capabilities. While Vipshop continues to make the most of current e-commerce tailwinds, will you be adding VIPS stock to your portfolio?
L Brands Inc.
Following that, we will be looking at fashion retail giant, L Brands. For the uninitiated, it is the parent company of the Victoria’s Secret and Bath & Body Works (BBW) brands. Like most traditional retail players, the company did see business decline last year. This was especially the case as it was forced to close brick-and-mortar stores. However, it seems that the shift towards e-commerce has and continues to benefit L Brands. This is clear as LB stock has surged by over 420% since the March 2020 lows, a remarkable three-year high. This comes after the company reported its fourth-quarter financials.
After Wednesday’s closing bell, L Brands posted better-than-expected figures in its latest earnings report. Notably, the company posted an earnings per share of $3.03, compared to a loss of $0.70 the same quarter last year. Furthermore, it saw a total revenue of $4.82 billion for the quarter. Overall, the company continues to see consistent demand in its BBW business and improvement in its Victoria’s Secret section.
As it stands, consensus estimates from Wall Street put LB stock at a Moderate Buy rating. With the company set to spin-off its Victoria Secret business in the foreseeable future, L Brands continues to streamline its operations. Could this make LB stock a buy? You tell me.
Best Buy Company Inc.
Next, we will be looking at Best Buy. The company is a leading provider of consumer tech products, services, and solutions. Not to mention, the company has over 1,000 stores across the U.S., Canada, and Mexico. In addition to that, Best Buy also claims that 70% of the U.S. population lives within 15 minutes of one of its stores. Right now, I would expect investors to be watching BBY stock as the company just reported its fiscal year 2021 earnings yesterday.
In detail, Best Buy posted total revenue of $47.2 billion for the year, an 8% year-over-year increase. Upon closer inspection, the company saw growth in both its domestic and international segments throughout the financial year as well. Moreover, Best Buy’s online sales revenue skyrocketed by almost 90% throughout the quarter to a record $6.7 billion.
Moreover, CEO Corie Barry provided an update on Best Buy’s strategy moving forward. In summary, the company will be streamlining its operations and doubling down on e-commerce. It will do so by trimming down its employee count and reskilling others for digital roles. If anything, the pandemic has likely changed the way consumers shop, and it seems like Best Buy has no plans on being caught off guard again. Would all this make it a good time to buy BBY stock? Your guess is as good as mine.