While economists expected the resurgence of COVID-19 cases and supply chain bottlenecks to affect consumer activity and retail sales last month, a pickup in activity due to back-to-school shopping and strong sales across…
most areas resulted in a positive surprise.
Overall retail sales in August were up 0.7% seasonally adjusted from July versus the Dow Jones estimate of a 0.8% decline.
Because retail sales are expected to be strong in the coming months also, we think it could be wise to bet on fundamentally sound retail stocks Target Corporation (TGT – Get Rating), Caleres, Inc. (CAL – Get Rating), Tilly’s, Inc. (TLYS – Get Rating), and Tile Shop Holdings, Inc. (TTSH – Get Rating). Each of these stocks is rated A (Strong Buy) in our proprietary POWR Ratings system.
Target Corporation (TGT – Get Rating)
TGT is a general merchandise retailer that offers food assortments, apparel, accessories, home decor products, electronics, seasonal offerings, and beauty and household essentials through its stores and digital channels. As of January 30, 2021, the company operated approximately 1,897 stores. TGT is headquartered in Minneapolis, Minn.
On August 23, TGT announced the return of Bullseye’s Top Toys for the holiday season, which are available at over 160 of The Walt Disney Company’s (DIS) stores at Target’s locations across the country. TGT hopes to provide a unique in-store experience and a stronger online presence by offering a curated toy assortment with more exclusives.
TGT announced The Fall Designer Collection on August 6, featuring more than 180 modern and classic fall wardrobe essentials from four design partners. Ranging in price from $15 – $80, TGT expects to generate good sales in the current fall season.
TGT’S total revenue for its fiscal second quarter, ended July 31, 2021, increased 9.5% year-over-year to $25.16 billion. The company’s operating income came in at $2.47 billion, up 7.3% from the prior-year period. Its net earnings were $1.82 billion for the quarter, representing a 7.5% rise from its year-ago period. Its adjusted EPS came in at $3.64, indicating a 7.9% year-over-year improvement. The company had $7.37 billion in cash and cash equivalents as of July 31, 2021.
TGT surpassed consensus EPS estimates in each of the trailing four quarters. A $24.52 billion consensus revenue estimate for the current quarter, ending October 31, 2021, represents an 8.3% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 13.3% rate per annum over the next five years.
The stock has gained 67.1% in price over the past year and 6.7% over the past three months. It closed Friday’s trading session at $246.67.
TGT’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a B grade for Value, Sentiment, and Quality. Click here to see the additional ratings for TGT (Growth, Stability, and Momentum).
TGT is ranked #2 of 41 stocks in the A-rated Grocery/Big Box Retailers industry.
Recently the Reitmeister Total Return Portfolio (RTR) closed a winning trade in TGT for a 65% gain. Learn more about the RTR service here.
Caleres, Inc. (CAL – Get Rating)
CAL, which is based in St. Louis, Miss. designs, sources, and markets licensed, branded, and private-label athletic, casual, and dress footwear products for women, men, and children internationally. The company sells its products through its branded retail stores and e-commerce businesses.
On September 13, 20CAL’s Sam Edelman debuted its new Sam Edelman Kids footwear collection designed exclusively in-house for…
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