3 Top Retail Stocks To Watch This Week
Retail stocks could be in focus in the stock market this week as investors eagerly await second-quarter earnings figures. After all, most names in the retail space would likely have seen solid quarters thanks to an uptick in consumer spending. Notably, this would be thanks to ample stimulus aid from the government and the economy reopening on improving pandemic conditions. Whether it is conventional brick-and-mortar stores or the increasingly prevalent e-commerce industry, retail stocks continue to ride industry tailwinds.
Even now, as the economy recovers albeit at more reasonable rates, retail stocks seem to be kicking into high gear. We could look at names such as L Brands (NYSE: LB) and Etsy (NASDAQ: ETSY). Firstly, L Brands recently finalized the spin-off of its Victoria’s Secret brand. According to founder Leslie Wexner, the company’s Bath & Body Works unit is planning to pursue a $1.5 billion share buyback after the spin-off. Simply put, the company appears to see greater value in its two key flagship brands operating as separate entities.
Secondly, e-commerce giant Etsy continues to aggressively expand its offerings now. Yesterday, the company reportedly closed its $1.625 billion acquisition of Depop, a digital apparel marketplace catered to Gen Z consumers. CEO Josh Silverman believes that the move serves to further diversify Etsy’s addressable markets and help fuel growth moving forward. Overall, both LB stock and ETSY stock are currently looking at gains of over 490% since their pandemic era lows. Elsewhere, even Chinese stocks in the retail space like Pinduoduo (NASDAQ: PDD) are now serving over 800 million active users. With the retail space gaining momentum, should investors be watching these top retail stocks in the stock market today?
Best Retail Stocks To Buy [Or Sell] This Week
- Shopify Inc. (NYSE: SHOP)
- AutoNation Inc. (NYSE: AN)
- Big Lots Inc. (NYSE: BIG)
Shopify Inc.
Starting us off today is one of the leading names in the e-commerce space now, Shopify Inc. In brief, Shopify operates via its proprietary e-commerce platform, offering retail point-of-sale and e-commerce storefront building services. Through its digital commerce solutions, Shopify caters to merchants and businesses of varying sizes across the globe. In terms of scale, the company powers over 1.7 million businesses in over 175 countries.
On top of all that, the company is also collaborating with Facebook (NASDAQ: FB) and Alphabet Inc’s (NASDAQ: GOOGL) Google as well. This is evident as Shopify’s e-commerce checkout system, Shop Pay, is available to retailers selling across both tech giants’ marketplaces. With the current shift in focus towards the e-commerce space, investors could be eyeing SHOP stock now. Evidently, the company’s shares are already looking at gains of over 16% in the past month. If that wasn’t enough, Shopify also reported stellar figures across the board in its latest quarter fiscal posted in April. In it, the company saw its total revenue skyrocket by 110% year-over-year. Over the same period, Shopify also reported a massive 3,781% surge in earnings per share.
If anything, Shopify seems to be focusing on growing its current merchant base aggressively. In its Unite 2021 conference last month, the company announced a slew of updates and new features to its flagship platform. Through its Online Store 2.0, Shopify provides merchants with more flexibility and customization to better optimize their storefronts. Moreover, the company is also waiving its 20% cut from clients on their first $1 million in revenue collected via the Shopify marketplace. Would you say all this makes SHOP stock worth watching ahead of the company’s upcoming earnings report on July 28?
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AutoNation Inc.
Following that, we have AutoNation Inc. In short, the Florida-based company is an automotive retailer, as the name suggests. Through its network of over 315 retail outlets, AutoNation provides new and pre-owned vehicles and related services across the U.S. According to AutoNation’s estimates, it has sold over 13 million vehicles to date. This would make it the first auto retailer to achieve this milestone. With consumers eager to travel again, I could see demand for AutoNation’s offerings rise across the board.
With all that in mind, it would make sense that investors are turning their radars towards AN stock now. In fact, the company’s shares are already sitting on gains of over 130% in the past year. While AN stock trades within striking range of its all-time high, would it have more room to run moving forward? Well, we could look at the company’s latest moves to get a clearer picture of this. As of late May, AutoNation is planning to make significant expansions to its U.S. network of stores. The first move in this plan saw the company launch its first AutoNation USA store in San Antonio, Texas. With AutoNation looking to have over 130 AutoNation USA stores operating from coast to coast by 2026, the company seems to be kicking into high gear.
While this is great, AutoNation is also gaining momentum on the financial front. This can be seen in its latest quarter fiscal posted in April. For the quarter, AutoNation raked in total revenue of $5.90 billion, indicating a 26% increase year-over-year. On top of that, AutoNation also posted year-over-year jumps of 203% in net income and 210% in earnings per share. All things considered, will you be investing in AN stock before its second-quarter fiscal due next week?
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Big Lots Inc.
Last but not least, we will be taking a look at home essentials retailer, Big Lots Inc. For some context, it identifies as a neighborhood discount retailer. The company currently markets its wares via its 1,400 stores that are strategically located across 47 U.S. states. Accordingly, Big Lots offers consumers a wide array of products to meet their daily, home improvement and lifestyle needs. This includes but is not limited to furniture, food consumables, and apparel. Given the variation in Big Lots’ retail offerings, BIG stock could be a viable play for retail investors in the current reopening trade. Seeing as the company’s shares have already more than tripled in value since its pandemic era low, this seems to be the case.
On the operational front, Big Lots appears keen to maintain its current momentum. As of late June, the company is currently rolling out its biggest expansion in the apparel department to date. Among the new types of apparel being added are active and “Athleisure” wear, summer clothing, new private label brands, and Disney-themed child wear. Namely, Big Lots appears to be optimizing its operations, catering to the entire family unit as clothing retail trends persist. CEO Bruce Thorn highlights that the company focused on introducing “functional everyday wear that’s comfortable, yet fashionable” to its stores when considering this expansion.
By and large, Big Lots continues to adapt its business strategy to shifting market dynamics. Not to mention, this move would also be supported by its vast array of e-commerce services. This includes its buy online pick up in-store, curbside pickup, and same-day delivery solutions to name a few. With all this in mind, would you consider BIG stock a top buy this week?
