Valentine's Day is just around the corner. With regard to spending, the holiday isn't as big as Black Friday or the Christmas shopping period, but is looked upon favorably by a small handful of retail operators that specialize in Valentine's Day-related goods. Common Valentine's Day gifts include flowers, jewelry, candy and other upscale items to really show you care. Dining out is also high on the list for many couples. With that, below are five companies that are looking forward to Cupid working his magic on Valentine's Day. (Holiday expenses can drown you in debt. Find out how to avoid this festive spending hangover. See How To Reduce Holiday Debt.)
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1-800 Flowers.com (Nasdaq:FLWS)
Sending a dozen roses to a loved one is a longstanding Valentine's Day tradition. The tradition used to be taken care of with a visit to your local florist, but, like much other shopping, is quickly moving to the internet. The job is still carried out by local flower providers but routed through the website of online operators, such as 1-800-Flowers.com, which bills itself as "the world's leading florist and gift shop."
The company has been specializing in fresh-cut flowers and related gifts for special occasions since its founding in 1976 and lays claim to being one of the first firms to embrace the telephone as a way to place orders. Its migration to the web was only logical and the firm is one of the only pure-play florists trading on the market today.
A gift wrapped in one of Tiffany's blue boxes is a sure sign that you care, and affordable Tiffany silver can even be found amongst the expensive diamonds and other gold and platinum jewelry merchandise. Today, the company operates more than 200 stores across the world and operates a flagship store in New York, which also happens to be its headquarters.
Tiffany's fortunes were dented when the credit crisis caused a global recession, but they are roaring back in pretty quick fashion as consumers have traded back up to higher priced goods. The firm has also been around for nearly two centuries so has seen its fair share of ups and downs in the business cycle and knows how to handle them. As such, it will see many more Valentine's Days and has developed one of the best known and lasting brand names in the business.
Chocolate is another flagship gift to be shared during Valentine's Day and The Hershey Company is one of a small handful of pure play confectioners trading on the stock market. Tootsie Roll is another, while archrival Mars is privately-held and Nestle trades primarily overseas. All of these companies offer seasonal Valentine's Day merchandise, with Hershey's Kisses a popular item during the season.
Hershey's traces its roots back close to more than a century and started producing milk chocolates in 1900. Today, the company sends its candy all over the world and is close to logging $6 billion in annual sales.
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Darden Restaurants (NYSE:DRI)
Couples intending to dine out during Valentine's Day could choose to eat at six different Darden's Restaurant concepts. Darden owns and operates the Red Lobster, Olive Garden, LongHorn Steakhouse, Capital Grille, Bahama Breeze and Seasons 52 restaurant franchises. There is a good chance of finding a local store as the company operates in 49 states and Canada.
Darden has proven adept at continually breathing life into more mature concepts, including its flagship Red Lobster and Olive Garden chains; Red Lobster has been around since 1968. The company is on the constant lookout for additional ideas that can succeed on a national scale and acquired Rare Hospitality a few years back to add Longhorn and Capital Grille to its stable of stores. (Don't put your money on the table before getting a taste for analyzing this sector. Check out Sinking Your Teeth Into Restaurant Stocks.)
It's hard to go wrong when shopping at upscale department store operator Nordstrom when shopping for Valentine's Day gifts. In addition to the wide array of shoes, apparel, purses, and perfume, the store prides itself on customer service to help shoppers find the ideal gift. The company was founded in 1901 in Seattle and continues to keep its headquarters out West.
In addition to the flagship namesake stores, the company operates a handful of Nordstrom Rack locations that sell discounted or off-price merchandise that are used to clear excess or less popular merchandise from the full-line stores. In similar fashion to Tiffany, Nordstrom was hit during the recent economic downturn but has recovered quickly and plans on continued growth.
The Bottom Line
Consumer sentiment improved over the most recent holiday season and this bodes well for Valentine's Day trends this year. By early March, the above retail operators should start releasing February store trends and the others will combine the holiday results along with their quarterly financials. Just like individuals lucky enough to have a significant other, the above firms are looking forward to the upcoming romantic holiday. (It's not all hearts and flowers, but there's romance in the language of Wall Street! See Love Around Wall Street.)
Disclosure: At the time of writing Ryan C. Fuhrmann did not own shares in any company mentioned in this article.
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