4 Stocks to Buy as E-commerce Holiday Sales Are Poised to Grow
Invest in names like Revolve Group (RVLV), Signet Jewelers (SIG), TJX Companies (TJX) and Walmart (WMT) as e-commerce looks ready to boost holiday ret...
E-commerce sales in the United States have continued to rise this year as well despite the widespread availability of vaccines allowing people to visit physical stores. Per the Commerce Department, e-commerce sales rose 9.3% year over year during the second quarter of 2021, as mentioned in a Packaging World article. Although the growth moderated from the record 43.7% rise in the second quarter last year when physical stores were mostly shut and people resorted to online shopping, growth still remained quite impressive.
Apart from the advantage of having goods delivered at their doorsteps, e-commerce platforms provide a vast catalog of products for consumers to choose from and easily access such websites on their smartphones, personal computers, laptops, and so on. What’s more, online shopping platforms offer personalized product recommendations, making it even more convenient for users to find exactly what they are looking for.
Owing to these myriad conveniences, the popularity of online shopping during the upcoming holiday season is expected to continue. Deloitte expects an increase of 11% to 15% in e-commerce sales year over year during holiday shopping, as mentioned in a PR Newswire article. In any case, consumers are widely expected to increase their spending this year. Citing a Reuters article, Americans have saved an excess of at least $2.5 trillion during the pandemic.
Per a separate estimate by Mastercard SpendingPulse, e-commerce sales during the extended holiday season, that is, between Oct 11 and Dec 24, is set to rise 7.5% year over year and 59.3% compared to the same period in 2019.
In fact, e-commerce sales staged a comeback in August following a decline in both e-commerce and overall retail sales in July. Per the Commerce Department, online retail sales rose 5.3% in August, turning around from a decline of 4.6% in July, as mentioned in the Reuters article. In fact, e-commerce bolstered overall retail sales in August which rose 0.7%, following a downwardly revised fall of 1.8% in July, as cited in the Reuters article.
Reflective of the continued popularity that e-commerce is enjoying in the United States, Statista estimated retail e-commerce sales as a percentage of total retail sales in the United States to rise to 15% in 2021 from 14.4% last year, and reach 16.3% in 2022.
4 Stocks to Invest in Now
The holiday shopping season seems poised to gain from the continued popularity of e-commerce as buyers look set to reap the benefits of shopping from the comfort of their homes. This makes it a good time to invest in companies that stand to benefit from this potential upswing. We have handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Revolve Group, Inc. RVLV operates as an online fashion retailer for consumers in the United States and internationally. On Sep 14, the company’s REVOLVE segment announced that it will add a range of health and wellness solutions from Hims & Hers to its website. Moreover, on Sep 1, Revolve Group’s FORWARD segment, announced celebrity, entrepreneur and supermodel Kendall Jenner as its new creative director.
Shares of Revolve Group have gained 119.7% year to date. The stock currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has moved up 22.1% over the past 60 days. The company’s expected earnings growth rate for the current year is 50%.
Signet Jewelers Limited SIG engages in the retail sale of diamond jewelry, watches and other products. The company operates online through its website JamesAllen.com for online diamond and bridal jewelry. The company has been boosting its online jewelry buying experience. During the second quarter of fiscal 2022, e-commerce sales were reported at $336.2 million, marking an increase of 24.5% year over year.
Shares of Zacks Rank #1 Signet Jewelers have risen 191.4% year to date. The Zacks Consensus Estimate for its current-year earnings has moved 21.6% north over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.
The TJX Companies, Inc. TJX, together with its subsidiaries, operates as an off-price apparel and home fashions retailer. The company operates three e-commerce websites in the United States, namely, tjmaxx.com, marshalls.com and sierra.com.
Shares of TJX Companies have risen 4.2% over the past six months. The Zacks Consensus Estimate for its current-year earnings has climbed 12.6% over the past 60 days. This Zacks Rank #2 company’s expected earnings growth rate for the current year is more than 100%.
Walmart Inc. WMT engages in the operation of retail, wholesale, and other units worldwide. The company’s Walmart U.S. segment operates an e-commerce website, namely, walmart.com. In the second quarter of fiscal 2022, the segment’s e-commerce sales rose 6%. On Jul 14, the company announced that the line-up of popular tween brand Justice will be available across Walmart stores as well as walmart.com.
Shares of Walmart have risen 8.1% over the past six months and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 6.4% over the past 60 days. The company’s expected earnings growth rate for the current year is 15.5%.
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