Retailers Beat March Estimates
The U.S. retail industry saw an increase in sales growth for the month of March, despite an increase in gasoline prices and other economic changes. This could imply that economic growth was stronger than people had expected in the first quarter, according to CNBC. The retail sales increase of 0.8% beat analyst expectations of 0.3%, which could encourage them to raise their first-quarter growth forecasts from their current annual rate of 2.5%.
Omer Esiner of Commonwealth Foreign Exchange said, "It's a clear sign that U.S. consumer spending remains strong. On balance I think it's the latest sign here that the U.S. economy is outpacing a lot of its major counterparts in recovery." Optimism over our economy took a slight hit, though, after a report showed New York state manufacturing slowed this month due to fewer shipments of goods. In contrast, factories hired more workers and received more revenue for their goods.
Auto sales also rose in March despite higher gas prices and reduced manufacturing due to the earthquake and tsunami that Japan experienced. Lower heating costs from the mild winter, which also helped consumers manage the gas price increases, are likely to have helped the increase in demand.
Business section: Investing ideas
Since retail saw a sales growth increase, there is potential for stocks to see the benefits. Below is a list of retail stocks with encouraging DuPont trends. Which retail stocks will see the most return from consumer purchases?
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Dollar General (NYS: DG) : Operates as a discount retailer of general merchandise in the Southern, Southwestern, Midwestern, and Eastern United States. It has a market cap of $15.53 billion. MRQ net profit margin at 6.99% vs. 6.38% y/y. MRQ sales/assets at 0.432 vs. 0.365 y/y. MRQ assets/equity at 2.075 vs. 2.354 y/y.
2. 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. It has a market cap of $13.42 billion. MRQ net profit margin at 8.% vs. 7.54% y/y. MRQ sales/assets at 0.726 vs. 0.688 y/y. MRQ assets/equity at 2.211 vs. 2.338 y/y.
3. Staples (NAS: SPLS) : Operates as an office products company. It has a market cap of $10.87 billion. MRQ net profit margin at 4.39% vs. 4.28% y/y. MRQ sales/assets at 0.481 vs. 0.461 y/y. MRQ assets/equity at 1.915 vs. 2.003 y/y.
4. Phillips-Van Heusen: Designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. It has a market cap of $6.10 billion. MRQ net profit margin at 5.3% vs. 3.73% y/y. MRQ sales/assets at 0.227 vs. 0.206 y/y. MRQ assets/equity at 2.487 vs. 2.778 y/y.
5. AscenaRetail Group: Operates as a specialty retailer of apparel for women and tween girls in the United States and Puerto Rico. It has a market cap of $3.25 billion. MRQ net profit margin at 7.39% vs. 5.65% y/y. MRQ sales/assets at 0.449 vs. 0.437 y/y. MRQ assets/equity at 1.528 vs. 1.573 y/y.
6. Saks: Operates fashion retail stores in the United States. It has a market cap of $1.68 billion. MRQ net profit margin at 4.% vs. 2.88% y/y. MRQ sales/assets at 0.435 vs. 0.404 y/y. MRQ assets/equity at 1.764 vs. 1.842 y/y.
7. Columbia Sportswear: Engages in the design, development, sourcing, marketing, and distribution of outdoor apparel, footwear, accessories, and equipment in the United States, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and Canada. It has a market cap of $1.63 billion. MRQ net profit margin at 6.98% vs. 5.73% y/y. MRQ sales/assets at 0.381 vs. 0.353 y/y. MRQ assets/equity at 1.287 vs. 1.292 y/y.
8. Vitamin Shoppe: Operates as a specialty retailer and direct marketer of nutritional products. It has a market cap of $1.29 billion. MRQ net profit margin at 4.38% vs. 3.31% y/y. MRQ sales/assets at 0.438 vs. 0.371 y/y. MRQ assets/equity at 1.379 vs. 1.632 y/y.
9. Vera Bradley Designs (NYS: VRA) : Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. It has a market cap of $1.15 billion. MRQ net profit margin at 14.94% vs. 13.01% y/y. MRQ sales/assets at 0.613 vs. 0.531 y/y. MRQ assets/equity at 1.77 vs. 3.203 y/y.
10. Finish Line (NAS: FINL) : Operates as a mall-based specialty retailer in the United States. It has a market cap of $1.09 billion. MRQ net profit margin at 9.19% vs. 8.91% y/y. MRQ sales/assets at 0.641 vs. 0.578 y/y. MRQ assets/equity at 1.344 vs. 1.356 y/y.
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.
At the time this article was published Kapitall's Danny Guttridge does not own any of the shares mentioned above. Data sourced from Google Finance. The Motley Fool owns shares of Staples.Motley Fool newsletter serviceshave recommended buying shares of Staples. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.