Nationwide retail sales declined nearly 2% in May. However, U.S. retail sales increased more than half a percentage point this past month. This is a positive sign considering some top economists predicted a 0.4% decline.
It is clear the demand for goods is strong, although consumer spending has shifted toward services as opposed to products. Consumer spending is an important gauge of economic health as it accounts for nearly three-quarters of all activity throughout the country. An increase in consumer spending is a sign the economy is transitioning to a higher gear.
The jump in retail sales is significant for apparel companies as heightened retail activity bodes well for clothing sales. Add in the fact that society is reopening, meaning people will spend more time socializing with others while rocking stylish threads, and there is even more reason to invest in apparel stocks. Three such stocks are Ross Stores (ROST), TJX Cos. (TJX), and Burlington Stores, Inc. (BURL).
Ross Stores (ROST)
ROST is an off-price clothing and home accessories, retailer. The company’s target demographic is young to middle-aged adults looking for value in return for their hard-earned money. ROST is currently trading at $121, merely $13 below its 52-week high of $134.22.
ROST has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. The stock has a grade of A in the Growth component and Bs in the Quality and Sentiment components. You can find out how ROST fares in the rest of the components, including Value, Momentum, and Stability, by clicking here.
Of the 66 publicly traded companies in the Fashion & Luxury industry, ROST is ranked 14th. You can find other top stocks in this industry by clicking here. Analysts have established an average target price of $139.14 for ROST. If the stock hits this price level, it will have increased by nearly 15%.
TJX Cos. (TJX)
TJX is one of the country’s top off-price retailers of clothing and home fashions. The company has more than 4,000 stores throughout the world.
TJX has an overall grade of B and a Buy rating in our POWR Ratings system.
The company has a grade of A in the Growth component and Bs in the Quality and Sentiment components. You can find out how TJX grades out in the rest of the components, including Stability, Momentum, and Value, by clicking here. TJX is ranked in the top 20 of the Fashion & Luxury industry.
Analysts view TJX as underpriced, setting an average target price of $78.77 for the stock. If TJX hits this price, it will have increased by nearly 19%. The stock’s average analyst price target has increased $8.61 in the last 34 weeks.
Burlington Stores, Inc. (BURL)
BURL, an apparel seller, based in New Jersey, is a Fortune 500 company. Though the mainstream investment media doesn’t pay much attention to BURL, the stock is certainly worthy of a close look. Step into a BURL store, and you will find everything from menswear to ladies sportswear, baby furniture, youth apparel, coats, home décor, and plenty more.
BURL has an overall grade of B, translating into a Buy rating in the POWR Ratings system. The stock has a Growth Brade of A and Bs in the Quality and Sentiment components. If you are curious as to how BURL grades out in the Value, Momentum, and Stability components, you can find out by clicking here.
Of the 66 publicly traded companies in the Fashion & Luxury space, BURL is ranked 35th.
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ROST shares rose $0.05 (+0.04%) in after-hours trading Wednesday. Year-to-date, ROST has declined -0.86%, versus a 18.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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