Retail sector shows signs of recovery with strong sales growth and positive earnings estimates

From Nasdaq: 2025-01-20 14:00:00

The retail sector has shown signs of recovery thanks to Fed rate cuts, with retail sales closing 2024 on a high. Five retail stocks, including Amazon, Walmart, Urban Outfitters, Costco, and Deckers Outdoor Corp, have positive earnings estimates and buy ratings. Retail sales saw a 3.9% growth in December, with strong performances in various categories.

Inflation slowing in December is good news for the retail sector, easing price pressures further. Higher consumer spending during the holiday season has boosted retail sales, with economists estimating a 3.3% growth in consumer spending in the fourth quarter. The Federal Reserve’s rate cuts have been instrumental in driving sales and are expected to continue supporting the retail sector.

Selected as potential growth stocks, Amazon, Walmart, Urban Outfitters, Costco, and Deckers Outdoor Corp all have positive earnings growth rates for the current year. Each stock has seen improvements in earnings estimates over the last 60 days and is rated either a Strong Buy or Buy. These companies have strong potential for solid returns in the retail sector.

Amazon.com, Inc. has a dominant position in e-commerce and cloud computing, with expected earnings growth of 82.4% for the current year. Walmart has evolved into an omnichannel player with a diverse product range and an expected earnings growth rate of 11.3%. Urban Outfitters offers lifestyle products and has an expected earnings growth rate of 20%. Costco Wholesale Corp operates membership warehouses with an expected earnings growth rate of 11.8%. Deckers Outdoor Corp specializes in niche footwear and has an expected earnings growth rate of 14.4% for the next year.



Read more at Nasdaq: 5 Stocks to Buy as Retail Sector Stages Roaring Recovery