Modern recession is now typical of the global economy, leading people everywhere to consider emerging forms of investment. For example, retail stocks are increasingly attractive to investors because they can now own a piece of where they shop.
However, your favourite store may not be the best investment for your portfolio. The COVID situation worldwide has brought massive gains on some retailers, whereas others have struggled. This is because consumers have stayed away from physical stores, causing e-commerce sales to boom along with sales for specific products.
As economies pick up in the aftermath of the pandemic, we now take a look into the top retail stocks that can make you wealthy.
Top Retail Stocks to Buy
Jeff Bezos has built Amazon.com (NASDAQ: AMZN) into an e-commerce powerhouse. After selling books at its inception, the company has dabbled in as many product lines as a multinational would. Industrial machines, 3D printers, fashion items, home appliances, and so forth are available on the Amazon website. Where the company isn’t stocking ka product, there’s an army of merchants who’ll likely do so.
After Mr Bezo stepped down in July 2021, it remains to be seen if the new leadership takes the company into new frontiers.
2. Home Depot
Home Depot (NYSE: HD) has stayed true to its large-format warehouse stores and unbeatable inventory formula. As a result, DIY homeowners and professional contractors love Home Depot. In addition, the company has gracefully segued into e-commerce while successfully sustaining its lead over competitors.
Home Depot reported good business during the pandemic as many more consumers took on home improvement during that time. The strong demand for housing in the US in the aftermath of the pandemic has helped the company continue to post impressive sales numbers,
Walmart is the gold standard in the retail business. Despite having a relatively weak third quarter in 2021 and the stock dipping by 5 per cent, this is one stock worth investing in. Analysts have cited supply chain concerns and an end to consumer stimulus payments as reasons for all this. Still, the outlook for the stock remains strong coming into 2022.
Inflation is at multi-year highs, but discount grocery retailers look set to gain market share from higher-end competitors. A strong inventory position will also help to offset supply chain issues.
The Bank of America (BoA) has a “Buy” rating for Walmart’s stock.
4. Lululemon Athletica
Despite being less popular than global heavyweights such as Adidas and Nike, Nike, Lululemon Athletica is a pioneer in the athletic clothing industry. Lululemon Athletica (NASDAQ: LULU) initially served the market for yoga apparel before slowly casting a wider net to capture consumers who want to wear comfortable dresses while staying fit.
Lululemon had several stores closed early in 2020 due to the pandemic, but they quickly recovered. Revenue improved by 61 per cent year-on-year in the second quarter of 2021. Revenues from stores grew by an astonishing 42 per cent. Their direct-to-consumer business posted modest growth of 8 per cent as normalcy commenced and shoppers visited stores.
There’s a high possibility of workers spending less time in-office after the pandemic, meaning Lululemon’s products could see record sales at the expense of formal workwear.
5. Ulta Beauty
Rounding out this list of top retail stock picks is Ulta Beauty, a brand dominating the trend of offering captivating in-store shopper experiences. For example, it offers in-store salon treatments to its customers. Customers obviously enjoy the idea, with stores attracting plenty of customers before the pandemic abruptly came on the scene.
Ulta Beauty’s strong sales have picked off after the lockdowns. Q2 2021 sales jumped by 56 per cent, a momentum since sustained as transactions continue to grow. As a result, Ulta Beauty is a good stock pick for your portfolio.
As economies pick up worldwide, lifestyles are still not entirely what they used to be. Complete normalcy may never return, and these companies have been nimble enough in finding ways to remain in business no matter what. With their recent strong showing on the stock market, you can trust their value to keep going up while you own a piece of the company.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only.