It’s supposed to be the happiest time of the year. But it is also the the busiest – and the most important – time of year for retail businesses.
According to the National Retail Federation, about 20% of a retailer’s annual sales volume occurs in November and December. For consumer discretionary stores like toy stores, jewelry stores, department stores, and electronics stores, that number is north of 30%.
Essentially, this is the decisive moment for retailers. Crush it in November and December, and you’ve made it a great year. Miss the mark, however, and you will be in severe pain.
This is why retail stocks are so volatile in the fourth quarter. A good vacation quarter could easily increase retail inventory by 20%, 30%, or even more in a matter of weeks. A bad vacation term could have the opposite impact.
So, with the most important shopping weekend of the holiday season now in the rear view (Black Friday-Cyber Monday), now is the time to dig into the data to find out which retailers are making big bucks this holiday season. .
This is exactly what we did –And we walked away with a few takeaways from the 2021 holiday shopping season that we think provide the foundation for retail inventory you should be buying right now. These takeaways are:
- It was a great holiday shopping weekend. According to the latest data from Mastercard SpendingPulse, Black Friday and Cyber Monday weekend retail sales are up about 14% year-on-year. It’s stronger than expected and indicates that a U.S. consumer is prepared to spend big after curbing some purchases last year amid the pandemic.
- Online retailing remained hot. Many people expected physical sales to rebound strongly in 2021 at the expense of online sales. But that didn’t really happen. According to Sensormatic Solutions, Black Friday store traffic fell 28% from 2019 levels, while Mastercard found e-commerce sales over the holiday shopping weekend increased by around 5%. % year-over-year, a 29% increase from 2019 levels. Comparatively, in-store retail sales were only up 2% from 2019 levels. Shopify also reported a very impressive 21% year-over-year increase in Black Friday sales, on top of a 75% increase last year.
- Department stores have rebounded. Gordon Haskett discovered that department stores thrive on Black Friday, while data from Mastercard shows spending at department stores increased by about 19% year-over-year over the weekend’s shopping weekend. Holidays. Our reading of the research interest trends for various department stores also showed promising year-over-year growth rates over the weekend.
- Everyone wanted to buy clothes. After buying little clothing during the 2020 holidays, consumers are ready to restock their wardrobes this holiday season. Several companies pointed out that clothing stores were a bright spot during the holiday weekend. It should be noted that a survey by Gordon Haskett of Black Friday shoppers showed a sharp increase in the number of shoppers who made a purchase in the clothing category.
- People are proposing again. Unsurprisingly, now that weddings can actually take place, there is a sudden increase in the demand for wedding rings and jewelry. According to Mastercard data, jewelry store spending has increased 78% year-over-year so far this holiday shopping season.
- Gambling is at the center of consumers’ concerns. According to data from Adobe Analytics, consoles and gaming hardware were the top sellers last weekend, including PS5, Switch and Oculus headsets.
- Sporting goods stores posted a strong performance. Several companies, including Bank of America and Adobe, have pointed out that sporting goods stores are enjoying high demand this holiday season. Our online channel checks corroborated this sentiment.
Based on this information, we’ve identified around 27 retail stocks that we believe are already gaining big this holiday season.
These include the large operators of department stores such as Walmart (WMT), Target (TGT), Macy’s (M), and Nordstrom (JWN), as well as sporting goods stores like Dick’s Athletic Goods (DKS) and Fat 5 Athletic Goods (BGFV). Our channel checks as well as external data suggest these stores had a big holiday shopping weekend.
We are also optimistic about Lululemon (LULU), Adidas (ADDYY), and Nike (NKE), because it looks like the athleisure trend is gaining traction this holiday season. crocs (CROX) also stand out, according to our data, at the start of the holiday season. In the apparel world, our data suggests Tilly (TLYS) and Express (EXPR) enjoyed strong demand last weekend.
Outdoor clothing and items were hot items this past weekend. We think the big winners were Yeti (YÉTI) and Colombia Athletic wear (COLME). Our channel checks also suggested strong demand for home improvement stores like Home deposit (HD) and Lowe’s (MEUGLER).
In the online retail world, we think the biggest winner last weekend was Shopify (STORE) in the midst of a shift towards buying from small retailers and traders.
On the gaming front, we believe the big winners are Meta (FB), thanks to a supercharged demand for its Oculus headset, as well as to Roblox (RBLX), given that all of those headset buyers will likely log into the Metaverse, and Roblox has the most established Metaverse today.
And, finally, we continue to believe that resale and social platforms will have a great holiday season, with their big gains coming in the next few weeks as buyers receive more “out of stock” messages. . Our list of winners includes Etsy (ETSY), Poshmark (CHIC), ThredUp (TDUP), The Real Real (REAL), eBay (EBAY), Break (BREAK), Pinterest (PINS), and Twitter (TWTR).
Now, let’s be clear on something: We think these 27 retail stocks represent good investment opportunities – but not. the best investment opportunities.
That’s because the best investment opportunities don’t emerge from a holiday shopping trend that can come and go; rather, they emerge from a technological innovation that is changing the world and that will evolve over the next few years, will have an impact on people’s personal and professional lives and ultimately create a ton of economic value for shareholders.
The best investment opportunities, in short, are found in early stage technology disruptors.
Like that little $ 3 stock that’s at the root of what I think is the biggest technological breakthrough of our lives: the creation of a battery forever This will allow electric vehicles to travel thousands of miles, your phone to stay charged for weeks, and your home to run exclusively on clean energy.
It’s a technological breakthrough like no other – and an investment opportunity that could strike millionaires.
So give yourself a gift this holiday season, and for just $ 3, potentially buy yourself a ticket to financial independence.
Click on here to know more.
PS In order to better prepare for what 2022 will bring, Louis Navellier, Eric Fry and I are organizing a special event soon. Tuesday December 7 at 7 p.m.. IS. We call it Early Warning Summit, and that’s where we’ll unveil four stock picks that could skyrocket in 2022. All three of us see major events shake the markets next year, and those four stocks are the best stocks to own. Click here to register your spot.
At the time of publication, Luke Lango had (directly or indirectly) no position in any of the stocks mentioned in this article.