Top Retail Stocks to Watch – May 2nd

Retail Stocks to Consider – 2nd May

In the ever-evolving retail sector, certain companies have demonstrated remarkable resilience and growth. Here are some noteworthy retail stocks to consider:

Walmart Inc. (NYSE: WMT)

Walmart, the world’s largest brick-and-mortar retailer, reported sales of $611 billion in 2022. With over 10,500 stores globally, it serves more than 230 million customers weekly across 20 countries. Groceries account for over half of its annual sales, followed by general merchandise and health and wellness products. Notably, Walmart’s e-commerce revenue rose 21% globally in Q1 FY25, and its advertising business grew by 24%. The company is also undertaking cost-cutting measures, such as layoffs and employee relocations, coupled with store and warehouse automation to spur profitability.

Five Below (NASDAQ: FIVE)

Five Below is an American chain of specialty discount stores, with most items priced at $5 or below. The retailer offers a variety of merchandise, including games, fashion accessories, sporting goods, candy, hobbies, stationery, and books. In the past year, FIVE shares have lost 30.3%. For the three months ending February 3, 2024, Five Below’s net sales jumped 19.1% year-over-year, while earnings per share (EPS) grew by 19%. The company is slated to open 225 to 235 new stores in FY24 and convert approximately 200 stores to the Five Beyond format, while also expanding two distribution centers.

TJX Companies Inc. (NYSE: TJX)

TJX Companies operates a chain of off-price apparel and home fashion stores across the U.S. and internationally, including T.J. Maxx, Marshalls, HomeGoods, and T.K. Maxx. The retailer offers goods at 20%-60% discounts. TJX rewards shareholders with regular quarterly dividends of $0.38 per share, reflecting an above-average yield of 1.36%. For FY25, TJX expects to repurchase shares worth $2 to $2.5 billion. In Q1 FY25, TJX reported better-than-expected earnings and sales figures. For FY25, TJX forecasts comparable store sales growth between 2% and 3% while also boosting its EPS guidance to the range of $4.03 to $4.09.

Costco Wholesale Corporation (NASDAQ: COST)

Costco operates membership warehouses in various countries, offering branded and private-label products across multiple categories. As of March 2nd, shares of COST traded up $26.90, reaching $1,048.61. The company has a fifty-day moving average of $982.51 and a two-hundred-day moving average of $938.10. Costco has a market capitalization of $465.48 billion, a P/E ratio of 61.57, a price-to-earnings-growth ratio of 6.15, and a beta of 0.84. The company has a current ratio of 0.98, a quick ratio of 0.43, and a debt-to-equity ratio of 0.23.

Nike Inc. (NYSE: NKE)

Nike is one of the world’s most valuable and iconic brands for sports sneakers, apparel, equipment, and accessories. The company had global sales surpassing $45 billion in 2022. Nike sells its products through multiple channels, including over 1,200 physical stores, retail department and outlet stores, online, and direct-to-consumer. The company is consistently at the forefront of shifting consumer fashion trends. Nike shoes have hit collectible status, with sneakerheads willing to pay thousands for vintage and rare models, helping to create a growing secondary market. Nike stock has a five-year performance of 82% with a 1.07% annual dividend rate.

Ross Stores (NASDAQ: ROST)

Ross Stores is a well-known off-price retail chain operating under the brand names “Ross Dress for Less” and “dd’s DISCOUNTS.” The company offers a wide range of discounted apparel, footwear, home goods, and accessories from various brands. Ross Stores has built a strong customer base by providing value-conscious consumers with quality products at affordable prices. The company’s unique business model of purchasing excess merchandise from manufacturers and department stores enables it to offer customers significant discounts. Ross Stores has a strong presence in the retail sector and continues to expand its footprint, making it a prominent player in the off-price retail industry.

Best Buy Co., Inc. (NYSE: BBY)

Best Buy engages in the retail of technology products in the United States, Canada, and internationally. Its stores provide computing and mobile phone products, such as desktops, notebooks, and peripherals; mobile phones comprising related mobile network carrier commissions; networking products; tablets covering e-readers; smartwatches; and consumer electronics consisting of digital imaging, health and fitness products, portable audio comprising headphones and portable speakers, and smart home products, as well as home theaters, which includes home theater accessories, soundbars, and televisions. As of March 2nd, shares of BBY traded up $1.43, hitting $90.05. The company has a debt-to-equity ratio of 0.37, a current ratio of 1.00, and a quick ratio of 0.22. The firm has a market capitalization of $19.25 billion, a P/E ratio of 15.39, a price-to-earnings-growth ratio of 2.10, and a beta of 1.43. The business has a 50-day moving average of $86.40 and a 200-day moving average of $90.62. Best Buy has a fifty-two week low of $69.29 and a fifty-two week high of $103.71.

Target Corporation (NYSE: TGT)

Target operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. As of March 2nd, shares of TGT traded up $1.87, hitting $124.37. The company has a debt-to-equity ratio of 0.99, a current ratio of 0.94, and a quick ratio of 0.25. The business has a 50-day moving average of $133.77 and a 200-day moving average of $142.39. The firm has a market capitalization of $56.99 billion, a P/E ratio of 13.19, a price-to-earnings-growth ratio of 1.94, and a beta of 1.15.

Sprouts Farmers Market (NASDAQ: SFM)

Sprouts Farmers Market is a grocery store chain specializing in natural and organic products. With a focus on healthy and sustainable offerings, SFM provides fresh produce, natural meats, bulk foods, vitamins, and more. The company emphasizes a farm-to-table approach and aims to provide customers with affordable, high-quality options for healthier living. Sprouts Farmers Market sits at an interesting intersection of trends that should play in its favor for years to come. With a focus on healthy and sustainable offerings, it plays off the broader trend towards mindfulness around healthy consumption. But it also makes sure to concentrate on value and inexpensive options, which can be hard to do when providing high-quality products.

Deckers Outdoor Corporation (NYSE: DECK)

Deckers Outdoor is the parent company of footwear brands such as Hoka, Uggs, and Teva. In its first-quarter earnings report on July 25, 2024, Deckers reported revenue up 22% year-over-year and earnings up a whopping 87%. That’s impressive growth, and the company is entering what is typically the best two quarters of its fiscal year. DECK stock has jumped 7.9% since the earnings report but was down nearly 10% before that. If you’re not invested in DECK stock yet, you may want to wait until the stock splits to take a position.

e.l.f. Beauty (NYSE: ELF)

e.l.f. Beauty is a cosmetics and skin care company that has been one of the fastest-growing companies in the sector. In fiscal year 2024, e.l.f. Beauty increased its market share by a whopping 305 basis points. One reason for that growth is the company’s commitment to its formulas being 100% vegan, with no animals harmed in their creation. That