Should Investors Be Watching These Top 3 Consumer Stocks Now?
As most investors would know, inflation is a prominent factor to consider when investing in the stock market today. However, as inflation rates continue to rise, investors may want to consider consumer stocks now. Sure, some could argue that the current price hikes for both buyers and producers would mean headwinds for the industry. While this would be the case amidst ordinary times, it may not necessarily apply to the current market. After all, the economy is currently on the uptrend, albeit at a rapid rate as consumers are eager to spend their saved-up funds. Could investor concerns over the current inflation spikes be overblown?
Well, the Federal Reserve seems to believe so. Vice-Chairman Richard Clarida recently commented on this, saying, “I continue to believe as my baseline case that this will prove to be largely transitory.” Fed officials maintain that the current high inflation data readings are mostly thanks to temporary factors. Said factors would include semiconductor chip shortages and surging consumer demands. Therefore, investors may be wise to keep an eye on some of the latest movers in the stock market right now.
For instance, we could look at retail giants such as Amazon (NASDAQ: AMZN) and Kroger (NYSE: KR) right now. On one hand, Amazon continues to dominate the e-commerce space. Supporting this is investment banking firm JPMorgan (NYSE: JPM). According to the company’s analysts, Amazon could be on course to overtake Walmart (NYSE: WMT) as the largest U.S. retailer by 2022. On the other hand, supermarket chain giant Kroger recently held a virtual hiring event. Last Thursday, the company hired 10,000 workers to bolster its organization across the board. Seeing as consumer-focused industries continue to gain momentum, could one of these top consumer stocks be worth investing in now?
Best Consumer Stocks To Watch In June 2021
Urban Outfitters Inc.
First up, we will be looking at Urban Outfitters Inc. (URBN). In short, it is a leading lifestyle products and services company. The company primarily markets its portfolio of global brands consisting of Anthropologie, BHLDN, and Urban Outfitters among others. According to URBN, the company operates out of 650 stores across the U.S., Canada, and Europe. Moreover, it also provides shoppers with digital retail experiences via its global website and catalogs. For investors, URBN stock has already more than doubled in value over the past year. As shoppers return to the malls in search of new outfits, could URBN be a top watch?
Evidently, URBN is kicking into high gear now thanks to the current industry tailwinds. In its recent quarter fiscal posted last month, the company saw record Q1 sales and earnings per share. Specifically, URBN raked in a total revenue of $927.42 million for the quarter, a 57% year-over-year increase. Adding to that, the company also posted massive year-over-year surges of 138% in both earnings per share and net income. According to CEO Richard Hayne, the company had “strong comps” and superb execution across the board to thank for this record quarter. Moving forward, Hayne also appears confident that the current summer sales trends could contribute to a great second quarter.
While all this is great for the URBN, it remains focused on optimizing its operations nonetheless. Yesterday, news broke of the company’s current work with data analytics company Qlik Technologies. CIO John Devine said, “This will help improve store performance wherever our associates are in the world while reducing the stress and costs associated with managing our on-premise data sources.” Given all of this, would you consider URBN stock a top buy now?
Best Buy Company Inc.
Following that, we have multinational consumer electronics company, Best Buy. To begin with, most U.S. households would be familiar with Best Buy. Naturally, this is because of the company’s extensive portfolio of home electronics that often come at affordable prices. For a sense of scale, Best Buy runs over 1,000 stores across the U.S. and Canada via 100,000 employees. With home improvement spending surging amidst the pandemic, Best Buy’s offerings would be in demand. Similarly, investors could be eyeing BBY stock which is up by over110% since its pandemic-era low.
Even now, the company seems to be strategically navigating market trends. As of yesterday, Best Buy customers can buy luggage and outdoor grills among other travel and outdoor items. This would serve to diversify its current tech offerings while catering to the needs of the recovering outdoor leisure industry. Similar to other retailers, Best Buy is expanding towards new categories which would bolster its market reach in the long run. At the same time, the company also plans to conduct its Black Friday sales digitally this year. This would allow more people to access the sales bonanza while adhering to social distancing recommendations.
If that wasn’t enough, Best Buy also saw solid figures across the board in its recent quarter fiscal posted in late May. Namely, the company saw its overall sales grow by 36% in the first quarter of 2021. CEO Corie Barry cited “extraordinarily high” consumer demand for tech products and services as a key growth factor for the quarter. Subsequently, CNBC’s Jim Cramer also noted that retailers such as Best Buy could benefit as these trends persist moving forward. Could this make BBY stock worth investing in for you?
Another big player in the consumer-focused market now would be Chewy Inc. For the uninitiated, Chewy is one of, if not the largest online retailer of pet-related products. From pet food and supplies to even prescription medications, Chewy is a one-stop platform for pet owners today. Notably, the company’s portfolio is home to 2,500 of the “most trusted brands in the pet industry”, according to Chewy. For one thing, Chewy’s services were crucial throughout the pandemic as physical pet supply stores were forced to close. Because of this Chewy saw demand for its offerings skyrocket throughout 2020. To point out, the company posted net sales of $7.15 billion in its fiscal 2020 report. Given Chewy’s convenient and affordable services, could CHWY stock be a top consumer stock to know now?
If anything, Chewy is not resting on its laurels just yet. This is clear given the company’s latest plays. Just last month, Chewy announced significant expansions to its proprietary telehealth vet service ‘Connect with a Vet’. Simply put, the company now offers video consultation and pre-scheduling features. Moreover, it also extended operational hours for the service on weekends. With the company jumping into the telehealth industry as well, we could be looking at exciting times ahead for Chewy.
Moving forward, industry trends appear to be playing towards the company’s advantage as well. Last week, CEO Sumit Singh reported that overall adoption rates across Chewy’s shelter partners are still on the rise. With Chewy’s addressable market expanding now, will you be adding CHWY stock to your portfolio?