Is It A Good Time To Buy Retail Stocks?
Retail stocks are once again making waves in the stock market today. For the most part, this would be the case as we enter another earnings week with the sector in the spotlight. This follows a generally lackluster week for the industry with heavy hitters like Walmart (NYSE: WMT) and Target (NYSE: TGT) reporting less-than-ideal results. Both firms, according to their respective earnings reports, continue to face macroeconomic headwinds across their massive operations. However, it is important to note that consumers continue to spend despite rising costs. According to the latest print from last week, retail spending increased by 0.9% in April. Additionally, the report indicates that miscellaneous retail and online sales rose by 4% and 2.1% respectively year-over-year.
Strong consumer spending aside, there is plenty of attention-grabbing news coming from the sector this earnings season as well. On one hand, AutoZone (NYSE: AZO) posted positive results in its latest financial update. According to the press release, the auto parts retailer’s earnings per share for the quarter is $29.03. For reference, this is versus the consensus of a $26.05 earnings per share on Wall Street. On the other hand, apparel retailer Abercrombie & Fitch (NYSE: ANF) is facing pressure after reporting an unexpected quarterly loss. While not all retail firms are made equal, could one of these major retailers be worth checking out in the stock market now?
Retail Stocks To Watch Right Now
- Ralph Lauren Corporation (NYSE: RL)
- Best Buy Company Inc. (NYSE: BBY)
- Petco Health And Wellness Company Inc. (NASDAQ: WOOF)
- Home Depot Inc. (NYSE: HD)
Ralph Lauren Corporation
Ralph Lauren is a global leader in the design and distribution of premium lifestyle products. It primarily has five categories across apparel, footwear, and fragrances among others. With over 50 years of experience in the industry, the company has developed a wide range of products known for quality and distinctive image. Today, the company reported its fourth-quarter financials for fiscal year 2022. Diving in, fourth-quarter revenues outperformed the outlook with double-digit growth across all regions. Net revenues for the quarter increased by 18% to $1.5 billion.
It also posted a gross profit of $966 million and gross margin was 63.4%. The company also increased its dividend by 9% to $0.75 per share. Total annual dividend amount was $3.00 per share. The next quarterly dividend is payable on July 15, 2022, to shareholders of record at the close of business on July 1, 2022. “Our teams around the world executed exceptionally well to deliver fourth-quarter and full-year results that exceeded our expectations as we continued to progress on our long-term strategic commitments,” said Patrice Louvet, President and Chief Executive Officer. “We have laid the groundwork for healthy sustainable growth and value creation in Fiscal 2023.” Given the strong quarter, should investors consider buying RL stock right now?
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Best Buy Company Inc.
Best Buy is a retailer that leverages its unique combination of tech expertise and human touch to meet its customer’s everyday needs. Impressively, it has over 1,000 stores across North America and also boasts an impressive e-commerce site. On May 24, 2022, the company reported its first-quarter financials. The company reported better-than-expected revenue at $10.64 billion, with its domestic segment representing a chunk of this revenue.
The company also reported a GAAP diluted earnings per share of $1.49 for the quarter. The domestic gross profit rate was 21.9% for the quarter. Also, in the company’s earnings report, Best Buy is updating its financial guidance to a revenue of $48.3 billion to $49.9 billion. This comes as the company continues to navigate through this rapidly changing environment while also committing to its long-term strategy and growth initiatives. All things considered, is BBY stock worth adding to your portfolio today?
Petco Health And Wellness Company Inc.
Another name to consider in the retail space today would be the Petco Health and Wellness Company. The company, as the name suggests, caters to pet owners and their furry friends. Simply put, Petco focuses on bringing comprehensive health and wellness solutions through its vast network of pet care facilities. The likes of which consist of over 1,500 centers across the U.S., Mexico, and Puerto Rico. Thanks to the company’s latest earnings update, investors could be looking at WOOF stock today.
Getting into the details, Petco reported overall commendable results in its first fiscal quarter. According to the earnings report, Petco’s earnings per share for the quarter is $0.17. Moreover, the company’s total revenue for the quarter is $1.48 billion. To put things into perspective, consensus figures on Wall Street are earnings of $0.15 per share and revenue of $1.45 billion. Namely, Petco cites continuous comparable sales growth as a key growth driver throughout the quarter. Worth noting, that this also marks the company’s 14th consecutive quarter of growth in terms of comparable-store sales. As such, would WOOF stock make your list of top retail stocks to buy now?
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Home Depot Inc.
Last but not least, we have Home Depot or HD, for short. In brief, it is among the largest names in the home improvement specialty retail market today. For a sense of scale, the company operates via a portfolio of 2,316 stores spanning the U.S., the District of Columbia, and Mexico among other locations. From appliances and tools to construction products, HD offers it all across its network of stores.
As a whole, HD appears to be kicking into high gear on the operational side as well. In its latest quarterly financial update from last week, the company posted record first-quarter sales. While several of its retail peers continue to weather headwinds, HD continues to press forward. Also in the company’s press release, HD is anticipating sales to increase by 3% year-over-year, above the Wall Street consensus of a 1.8% rise. With all this in mind, could HD stock be a top pick in your books?
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