Holiday Shopping: Top 9 Retail Stocks with Encouraging Profitability Trends
If you start seeing Santa Claus in window displays before you've even stocked up on Halloween candy, don't worry. You haven't overslept.
Christmas is coming to stores even earlier this year. In fact, you may have noticed that holiday cheer has been coming to a retail store near you a little earlier ever year.
USA TODAYreports: "More than 37% of shoppers -- and 42% of women -- plan to do some holiday shopping by Halloween, reports an NRF consumer survey. Retailers are happy to oblige as they chase the estimated $450 billion of holiday spending."
So which retail chains have already jumped the gun? Costco started rolling out their red and green on September 1, Home Depot is scheduled for September 19, Kmart and Sears for September 25, and Walmart and J.C. Penney by month's end.
You can also buy an inflatable snowman or two at Lowe's starting October 1. But to think, you could have stocked up on fake mistletoe from A.C. Moore as far back as August!
If you're interested in trading on the trend, we list nine (one for each reindeer) retail companies below that have had encouraging profitability trends during the most recent quarter, while at the same time reducing leverage in their capital structure.
Is this a signal of more good news to come during this year's holiday season? (Click here to access free, interactive tools to analyze these ideas.)
1. V.F. (NYS: VFC) : Designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. MRQ net profit margin at 7.03% vs. 6.95% y/y. MRQ sales/assets at 0.271 vs. 0.252 y/y. MRQ assets/equity at 1.593 vs. 1.733 y/y.
2. Quiksilver (NYS: ZQK) : Designs, produces, and distributes branded apparel, footwear, accessories, and related products. MRQ net profit margin at 2.07% vs. 1.88% y/y. MRQ sales/assets at 0.291 vs. 0.263 y/y. MRQ assets/equity at 3.206 vs. 3.517 y/y.
3. Shuffle Master (NAS: SHFL) : Develops, manufactures, and markets technology and entertainment-based products for the gaming industry worldwide. MRQ net profit margin at 15.65% vs. 11.33% y/y. MRQ sales/assets at 0.176 vs. 0.168 y/y. MRQ assets/equity at 1.465 vs. 1.826 y/y.
4. JAKKS Pacific (NAS: JAKK) : Designs, produces, markets, and distributes toys and consumer products worldwide. MRQ net profit margin at 3.21% vs. 2.42% y/y. MRQ sales/assets at 0.215 vs. 0.205 y/y. MRQ assets/equity at 1.528 vs. 1.619 y/y.
5. Nordstrom (NYS: JWN) : Nordstrom,, a fashion specialty retailer, offers apparel, shoes, cosmetics, and accessories for women, men, and children in the United States. MRQ net profit margin at 6.23% vs. 5.81% y/y. MRQ sales/assets at 0.363 vs. 0.345 y/y. MRQ assets/equity at 3.862 vs. 4.031 y/y.
6. Ross Stores (NAS: ROST) : Operates off-price retail apparel and home accessories stores under the Ross Dress for Less and dd's DISCOUNTS brand names in the United States. MRQ net profit margin at 7.1% vs. 6.76% y/y. MRQ sales/assets at 0.684 vs. 0.671 y/y. MRQ assets/equity at 2.143 vs. 2.268 y/y.
7. Abercrombie & Fitch (NYS: ANF) : Operates as a specialty retailer of casual apparel for men, women, and kids. MRQ net profit margin at 3.49% vs. 2.61% y/y. MRQ sales/assets at 0.312 vs. 0.261 y/y. MRQ assets/equity at 1.547 vs. 1.57 y/y.
8. Jos. A Bank Clothiers (NAS: JOSB) : Design, retails, and direct-markets men's tailored and casual clothing and accessories. MRQ net profit margin at 8.91% vs. 8.75% y/y. MRQ sales/assets at 0.324 vs. 0.321 y/y. MRQ assets/equity at 1.356 vs. 1.378 y/y.
9. Destination Maternity (NAS: DEST) : Engages in the design and retail of maternity apparel. MRQ net profit margin at 6.45% vs. 6.09% y/y. MRQ sales/assets at 0.728 vs. 0.708 y/y. MRQ assets/equity at 2.194 vs. 3.015 y/y.
List compiled by Eben Esterhuizen.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman and Eben Esterhuizen do not own any of the shares mentioned above. Data sourced from Fidelity.
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