Posts Tagged ‘retail stocks’
Retail Stocks Find Big Success in the Great Outdoors
By Mitchell Clark, B.Comm. for Profit Confidential
The great outdoors are back—big time.
Among retail stocks, it was widely expected that Cabela’s Incorporated (NYSE/CAB) would report very good earnings results. But the company didn’t just announce good earnings—it hit a grand slam.
Cabela’s is the world’s largest direct marketer of hunting, fishing, camping, and other outdoors merchandise. It is one of those retail stocks that is implementing its business plan perfectly.
It currently has 41 stores in the U.S. and three in Canada, totaling 5.4-million square feet of retail space, up 5.8% since the end of 2012.
According to the company, its sales for the first quarter of 2013 grew to $802 million, representing a gain of $179 million, or 29%, over the comparable quarter.
Not surprisingly, the company’s hunting equipment category experienced the biggest increase in sales.
The company said that its comparable store sales increased 24%, which is an outstanding performance in retail merchandising.
First-quarter earnings grew 73% to $49.8 million, way up from earnings of $28.8 million. Earnings per diluted share grew 75% to $0.70 from $0.40 in the comparable quarter.
Cabela’s five-year stock chart is featured below:
Chart courtesy of www.StockCharts.com
While the sale of firearms and ammunition was expected to be strong, what was notable about Cabela’s first-quarter earnings performance is the strength experienced in other categories.
The company said it experienced strong growth in the sale of soft goods, footwear, optics, and archery. Excluding firearms and ammunition, comparable store sales increased nine percent, which is impressive. (See “Tills Ringing for Costco, Cabela’s—Obama Effect or Big New Trend?”)
As is the case with many corporations today, Cabela’s cash … Read More
From Discount to Big Box: Some Retailers to Watch
By George Leong, B.Comm. for Profit Confidential
It’s now officially the holiday shopping season after a relatively decent Good Friday and Cyber Monday. Online spending, according to the Adobe Digital Index, is estimated to reach record sales of around $2.0 billion, up 17% year-over-year. (“Cyber Monday Sales Climb to Record $2 billion,” BGR, last accessed November 27, 2012.) If the numbers are any indication, the retail sector could be in for a strong holiday shopping season over the next four weeks. We know shoppers are the most confident since February 2008, as the Conference Board consumer confidence reading came in at 73.7 in November. Add in the continued uptrend in home prices and, hopefully, job creation into 2013, and you have a good and much-improved climate for the retail sector.
Given what will be higher consumer spending as we head into 2013, the retail sector will definitely be a place to park some investment capital. I recently talked about some of the leading luxury stocks to look at, especially as a play on the strong retail sector market in China. (Read “Luxury Stocks That Are Leading the Pack.”)
The retail stocks that I envision to be successful will be both the manufacturers and the retail outlets.
For the more conservative investors looking for steady growth and dividend income, at the top of my list in the retail sector is Wal-Mart Stores, Inc. (NYSE/WMT) and Target Corporation (NYSE/TGT). Wal-Mart is an excellent global retail sector play, but it will need to get deeper into China to really make a dent and drive the share price higher. Target is intriguing, as the “poor cousin” of Wal-Mart … Read More
The Best Retail Stocks this Holiday Shopping Season
By George Leong, B.Comm. for Profit Confidential
Today is the big day for you shoppers! It’s Black Friday, and the retail sector is hoping you have the “shop until you drop” mentality this year. Retail heavyweights Wal-Mart Stores, Inc. (NYSE/WMT) and Target Corporation (NYSE/TGT) are two major retailers that decided to open their doors Thursday night and enter the Black Friday shopping window earlier.
At stake are billions of dollars and the potential to give the retail sector a significant boost in the fourth quarter.
The post-Thanksgiving shopping season for the retail sector is critical. Retail sales have increased in three straight years and hopes are for another great year. (Read “Why the Market Needs a Big Black Friday.”) Yet there is some caution. The National Retail Federation (NRF) is estimating that the retail sector could see sales jump 4.1% in the November to December period, versus 5.6% during the same period last year. The slower estimated growth could be due to the uncertainty of the fiscal cliff, and its impact on spending and the economic recovery. Consumers don’t like uncertainty.
So when you are shopping today at the stores or online, keep in mind that every dollar you spend will help America’s ability to expand as we head into 2013.
The question is: which will be the best retail stocks this holiday shopping season? My feeling is that buying in the retail sector continues to be selective and somewhat cautious, as evidenced by the retail sales reading in October that pointed to a 0.3% decline in total spending, worse than the market estimates and the 1.3% reading in September.
While the readings in … Read More
Who’s Benefiting? Discount
Retail Stocks Hitting New Highs
By Mitchell Clark, B.Comm. for Profit Confidential
Want to know which stock market sector is making new record highs in this market? Retail stocks. Of course, the retail stocks that are doing great aren’t the big luxury names, but the discount retailers that are benefiting from the age of austerity. (See “Who Benefits in an Economy and Stock Market Like Today’s?”)
The stock market has been very kind to discount retail stocks that have produced solid revenue and earnings growth in an otherwise tough market for merchandizing. Stocks like Wal-Mart Stores, Inc. (NYSE/WMT), Target Corporation (NYSE/TGT), and The TJX Companies, Inc. (NYSE/TJX) are all doing exceptionally. The TJX Companies, which operates T.J. Maxx, Marshalls, Winners, HomeSense, and HomeGoods stores, has basically been going straight up on the stock market since 2001.
Retail stocks can be just as volatile as technology stocks. Like always, it all depends on the business cycle and what companies are benefiting from the economic times we’re experiencing. While retail stocks like Wal-Mart, Target, and TJX are doing great, Ralph Lauren Corporation (NYSE/RL) just warned on its revenues for its next quarter.
Target has really done well on the stock market since the beginning of this year. Wall Street earnings estimates have been going up across the board for all of 2012 and 2013. The company also did what all investors like; it recently increased its regular quarterly dividend by 20%. In addition, there are solid expectations for its upcoming quarter.
Retail stocks are emblematic of the current economic environment. If consumers are buying Ralph Lauren polo shirts, times are good. If business is booming for Wal-Mart, Target, and TJX, then you … Read More
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