Retail sales declined in December, but overall holiday sales have beaten expectations, with people aggressively making holiday purchases. As inflation somewhat eased from its earlier highs, consumers spent more freely during the holiday season.
According to a new report from Salesforce, Inc. (CRM), e-commerce played a major role in driving holiday sales globally, with sales hitting a new high this year. An increasing number of people are now relying on e-commerce to make retail purchases, which has been aiding the industry. Given this scenario, stocks with a strong online presence like Capri Holdings Limited CPRI, Casey’s General Stores, Inc.CASY, Ross Stores, Inc. ROST and Arhaus, Inc. ARHS are expected to benefit in the near term.
E-Commerce Driving Retail Sales
According to a Salesforce report, online sales surpassed $1.14 trillion globally during the holiday season. The report also mentions that online sales in the United States totaled $270 billion in November and December, indicating that people spent quite freely during the holiday season despite high commodity prices.
One of the major reasons behind the jump was better deals during this holiday season than in 2021. On average, there was a 21% discount on products this holiday season compared to 19% in 2021. Categories that offered the maximum discounts were skincare, beauty and makeup, which gave an average discount of 29%.
One out of every five orders placed globally during the holiday season was bought online or picked up in store.
A separate report from Adobe Analytics shows that Cyber Monday’s Internet sales came in at $11.3 billion, up 5.8% from 2021. Cyber Monday sales reached $10.7 billion in 2021 and $10.8 billion in 2020, respectively. The sales figures for this year set a new record after falling 1.4% in 2021.
Additionally, Black Friday saw a record-breaking $9.12 billion in Internet purchases. On Black Friday, overall e-commerce sales increased 2.3% from 2021. Black Friday sales totaled $9.03 billion in 2020.
The reports came as data showed inflation slowing in November and December. This has given a boost to the confidence of people as they feel inflation has reached its peak and is finally easing, which has been making them spend more freely.
E-commerce has been playing a major role in driving retail sales ever since the onset of the pandemic. The pandemic compelled people to shop online in order to maintain social distancing. The trend has continued since consumers have finally realized the comfort and ease of shopping online.
According to Mastercard SpendingPulse e-commerce made up 20.9% of the total retail sales in 2021, while 20.6% of sales were online in 2020.
Given this scenario, it would be wise to invest in these four stocks with a strong online presence. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Capri Holdings Limited provides women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. CPRI operates in the global personal luxury goods industry, which has been severely impacted by the outbreak of the coronavirus.
Capri Holdings Limited’sexpected earnings growth rate for the current year is 10.6%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. CPRI presently carries a Zacks Rank #2.
Casey’s General Stores, Inc. operates convenience stores under the Casey’s and Casey’s General Store names in 16 Midwestern states, mainly Iowa, Missouri and Illinois. CASY also operates two stores under the name Tobacco City, selling primarily tobacco and nicotine products, one liquor store, and one grocery store.
Casey’s General Stores’ expected earnings growth rate for the current year is 18.4%. The Zacks Consensus Estimate for current-year earnings has improved 7.5% over the past 60 days. CASY currently has a Zacks Rank #2.
Ross Stores, Inc. operates as an off-price retailer of apparel and home accessories, primarily in the United States. ROST operates its stores under the Ross Dress for Less (Ross) and dd’s DISCOUNTS names. Ross Stores primarily offers in-season, branded, and designer apparel, footwear, accessories and other home-related merchandise for everyone in the family.
Ross Stores’ expected earnings growth rate for next year is 14.7%. The Zacks Consensus Estimate for current-year earnings has improved 7.8% over the past 60 days. ROST presently sports a Zacks Rank #1.
Arhaus, Inc. is a lifestyle brand and omni-channel retailer of premium home furnishings. ARHS offers assortment of heirloom quality products. Arhaus Inc. is based in Boston Heights in Ohio.
Arhaus Inc.’s expected earnings growth rate for the current year is 21.7%. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the past 60 days. ARHS presently sports a Zacks Rank #1.
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