Do You Have These 3 Retail Stocks On Your Watchlist?
As we approach the second half of 2022, retail stocks would be an interesting play for investors to consider. After all, even as inflation persists, some of the biggest retailers are dealing with growing inventories. Because of this, firms like Target (NYSE: TGT) are hosting their Target Deal Days 2022 next month. The likes of which would attract consumers looking for deals amidst rising prices. With the 75-basis point hike earlier this month, all eyes will be on the central bank to decide on its next monetary move in July. Nevertheless, not all retail companies are built the same and there are, arguably, opportunities for eagle-eyed investors looking for retail stocks in the stock market today.
Take Walmart (NYSE: WMT) for instance. As of today, Walmart is acquiring Memomi, an augmented reality optical tech company. Since 2019, Memomi has enabled digital measurements across more than 2,800 Walmart Vision Centers. With this acquisition, Walmart is able to keep providing enjoyable, frictionless virtual optical try-on features and contact-free digital measurements. Additionally, the acquisition strengthens the capability of the online store to provide a variety of integrated omnichannel solutions. This includes healthcare, employing data and tech to promote engagement, health equity, and outcomes.
Another retail stock investors may be considering is Ulta Beauty (NASDAQ: ULTA). The beauty retailer has just been upgraded by Raymond James (NYSE: RJF) equity analyst Olivia Tong. The upgrade is from an Outperform rating to a Strong Buy rating. Also, Tong is raising the firm’s price target from $475 to $485. In summary, this upgrade was made because of the attractiveness of the high-growth beauty category. Furthermore, Tong also argues that Ulta is among the “most resilient stocks in the market” despite rising concerns of a recession. Considering all of this, here are three more retail stocks for your July watchlist.
Retail Stocks To Buy [Or Sell] Today
- Nike Inc. (NYSE: NKE)
- MINISO Group Holding Ltd. (NYSE: MNSO)
- General Mills Inc. (NYSE: GIS)
Nike Inc.
Starting us off today, we have Nike, a retailer that designs and manufactures footwear, apparel, and equipment. The company is one of the most valuable sports apparel brands in the world and has very strong brand recognition with a loyal base of users to boot. It also owns the subsidiary, Converse, a lifestyle and skating shoes company. On Monday, the company announced its fiscal 2022 fourth quarter and full-year financials.
Diving in, revenue for the quarter was $12.2 billion. Its Nike Direct reported fourth-quarter revenue of $4.8 billion, up by 7% year-over-year. On the other hand, wholesale reported revenues for the fourth quarter were $6.8 billion. “Nike’s results this fiscal year are a testament to the unmatched strength of our brands and our deep connection with consumers,” said John Donahoe, President, and CEO, Nike, Inc. “Our competitive advantages, including our pipeline of innovative product and expanding digital leadership, prove that our strategy is working as we create value through our relentless drive to serve the future of sport.” The company says that after two years after executing its Consumer Direct Acceleration, it is now better positioned than ever to drive long-term growth while also serving its consumers directly at scale.
On top of that, the company also continues to have a strong record of investing to fuel growth and has consistently increased returns to shareholders. This would include 20 consecutive years of increasing dividend payouts. For instance, it returned approximately $1.5 billion to shareholders, with dividends of $481 million and a share repurchase of $1.1 billion. All things considered, would NKE stock make your list of top retail stocks to buy today?
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MINISO Group Holding Ltd.
Miniso is a retailer that primarily offers a range of design-driven lifestyle goods. In particular, the company focuses on home and consumer products like cosmetics, stationery, toys, and kitchenware. The company sells these products at affordable prices making them attractive to consumers that are on a budget. Since the opening of its first store in 2013, Miniso now has over 5,000 stores worldwide.
Today, Miniso has announced the beginning of its global offering of more than 41 million common shares of the company. This offering comprises the public offering in Hong Kong of over 4 million common shares starting on June 30, and an international offering of 39 million shares starting today. Following this, the company will hold an annual general meeting of shareholders on July 11. The purpose of this meeting is to propose an amendment and reinstatement of its memorandum and articles of association.
Last month, Miniso announced its March Quarter 2022 financial results. Among its highlights, revenue was $369.3 million, representing an increase of 5% year-over-year. The company’s gross profit was $111.5 million, an increase of 12.8% year-over-year. According to CFO Saiyin Zhang, he is optimistic in their growth potential in inflation times. He adds that “the fundamentals of the business remain strong, and will continue to focus on the parts of the business they can control.” With these strong financial results, is MNSO a buy right now?
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General Mills Inc.
Following that, we have General Mills, a multinational manufacturer of branded consumer foods sold primarily through retail stores. It serves iconic brands like Cheerios and Häagen-Dazs and has been doing so for the last 155 years. In fact, it developed many firsts like the gold standard in food safety. Today, the company also reported its fourth-quarter and full-year financials for fiscal 2022. Also, it provided a fiscal 2023 outlook as well.
Firstly, General Mills reported net sales of $4.9 billion for the quarter, increasing by 8% year-over-year. Thanks to its Accelerate strategy, the company has executed well on its core business and has also taken significant steps to reshape its portfolio. This would include the acquisition of companies like Nudges and True Chews. It has also managed to respond quickly to address the challenges of inflation and supply chain disruptions. Secondly, the company also reported a diluted earnings per share of $1.35, almost doubling year-over-year.
For its fiscal 2023 outlook, the company anticipates double-digit inflation in its cost of goods sold in fiscal 2023 and is addressing this headwind with Holistic Margin Management (HMM) cost savings and net price realization generated through its Strategic Revenue Management (SRM) capabilities. With that, General Mills expects organic net sales to increase 4 – 5%. Given all of this, is GIS stock a top retail stock to consider adding to your portfolio?
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