3 Top Retail Stocks To Watch This Week Amid Earnings
As we begin another week of trading, retail stocks could be taking center stage in the stock market. Namely, some of the biggest names in the industry are set to report their second-quarter earnings this week. Take Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) for example. Now, with a resurgence in coronavirus cases, investors could be considering how things will play out in the retail space. Specifically, should these conditions persist, some would argue consumer home improvement retail trends could gain momentum. So far, both HD stock and LOW stock are looking at gains of over 110% since their pandemic-era lows.
On top of that, department store giants like Macy’s (NYSE: M) and Kohl’s (NYSE: KSS) could also be in focus. Aside from reporting their earnings on Thursday, the two companies have another thing in common. Both M stock and KSS stock are still trading below their pre-pandemic levels. Sure, the current updates on the pandemic could possibly put a damper on their brick-and-mortar services. However, the duo, like most names in the retail space, have better adapted their operations towards pandemic conditions. In fact, Macy’s is currently looking to achieve up to $10 billion in annual digital sales by 2023. This could indicate that the industry’s focus on e-commerce is more than just a reactionary play for the pandemic.
Overall, I can understand the current allure of retail stocks for investors now. On one hand, some could be looking to get in on the action this earnings week. On the other hand, others could see long-term growth potential in some of the top names in the market. With all this in mind, here are three retail stocks to note in the stock market today.
Best Retail Stocks To Buy [Or Sell] Today
To begin with, we will be taking a look at Walmart. Seeing as it is the largest retailer in the world today, investors would be eyeing WMT stock now. For the uninitiated, the company primarily operates via its global network. The likes of which consist of hypermarkets, discount department stores, and grocery stores. On top of that, Walmart also offers consumers a wide array of e-commerce services as well. In terms of scale, the company caters to approximately 220 million customers weekly.
While all of this is great, could WMT stock have more room to run as a result? If anything, the company does not seem to be slowing down anytime soon. According to a recent post on its careers page, Walmart is hiring a “digital currency and cryptocurrency product lead”. In particular, the company is looking for someone who can provide leadership in identifying tech and customer trends. Given all the hype around digital currencies this year, this could be a timely move by Walmart. This would be the case as some of the biggest names in the fintech space are already adopting cryptocurrencies.
Not to mention, the company is also looking to invest almost $1 billion over the next five years towards employee training. The current plan includes paying for 100% of college tuition fees for Walmart associates, enabling them to upskill and earn degrees. Amidst the current labor market shortage, this would be a bold play to attract more potential employees. Overall, with Walmart set to report its earnings before tomorrow’s opening bell, will you be keeping an eye on WMT stock?
Costco Wholesale Corporation
Following that, we have the Costco Wholesale Corporation. In brief, the Washington-based company is a big-box store operator. For the most part, Costco manages a chain of membership-only big-box retail stores. The like of which offer consumers everyday groceries in large quantities. By Costco’s estimates, it currently boasts a network of over 800 warehouses across the U.S., U.K., and Canada among others. In theory, should coronavirus fears continue to rise among consumers, Costco’s offerings would be in demand.
Likewise, investors appear keen on COST stock as well. The company’s shares are up by over 25% in the past six months and continue trading towards newer heights. The real question now is, can it keep up its current momentum? For starters, we could take a look at its recent sales report. Earlier this month, the company reported solid sales figures for July. Notably, it raked in net sales of $176.3 billion for the month, marking a sizable 17.8% year-over-year increase. Specifically, Costco posted an impressive 48.9% increase in its e-commerce comparable sales over the same time as well.
While its retail peers report earnings this week, Costco has yet to reveal the date of its fiscal 2021 fourth-quarter fiscal. For some perspective, we could look towards its latest quarter fiscal posted back in May. In it, the company saw green across the board. It saw year-over-year increases of 45% in both net income and earnings per share for the quarter. Given all of this, would you consider COST stock a top buy in the stock market now?
Similar to our first entry, Target is also slated to report its latest quarter fiscal this week. With the company looking to do so before Wednesday’s opening bell, should investors be watching TGT stock now? Well, as another one of the major names in the retail space today, some would argue that Target would be a viable bet among retailers. In essence, the company caters to customers through its portfolio of over 1,900 stores nationwide.
Evidently, Target remains a go-to for consumers and investors alike this year. In its latest quarter fiscal posted back in May, the company posted stellar figures. Notably, it brought in a total revenue of $24.20 billion for the quarter, a 23% year-over-year increase. Moreover, Target also reported a massive year-over-year surge of 638% in net income. CEO Brian Cornell had this to say, “We’re confident in continued comp growth in the second quarter and through the remainder of the year, as well as a healthy full-year operating margin rate.” At the same time, TGT stock is looking at gains of over 180% since its pandemic era low.
By and large, Target appears to be kicking into high gear right now. So much so that the company even recently increased its quarterly dividend by a whopping 32%. CFO Michael Fiddelke cited “strong operating performance and cash generation” as core factors for this move. Would all of this make TGT stock worth investing in for you?