Online merchandising giant Amazon.com Inc. (AMZN) is gobbling up market share, putting large, established retailers in distress or into bankruptcy by the dozens. Nonetheless, a number of small, quick-footed players in retail are largely untroubled, Barron's reports, precisely because that they cater to niche clienteles. Amazon, by contrast, has its biggest competitive advantage with commoditized, mass-market products. Chris Terry, a portfolio manager and lead retail analyst at Hodges Capital. likes these retail stocks in particular: Tilly's Inc. (TLYS), American Eagle Outfitters Inc. (AEO), Boot Barn Holdings Inc. (BOOT), Duluth Holdings Inc. (DLTH) and Callaway Golf Co. (ELY).

Company Specialty YTD Gain 2018 Sales Growth 2019 Sales Growth
Boot Barn western wear 42% 6.5% 9.8%
Callaway golf apparel & gear 33% 13.0% 3.1%
Duluth work wear (4%) 25.6% 12.9%
American Eagle casual wear, youth 20% 2.9% 2.9%
Tilly's casual wear, youth (21%) 1.7% 4.0%

Source: Yahoo Finance; YTD gains are through the close on May 23; American Eagle and Tilly's have fiscal years that run through the end of January; their fiscal 2019 appears in the 2018 column above, and their fiscal 2020 appears in the 2019 column.

Boot Barn

While there is no national brand in Western wear retailing, Boot Barn comes close, with more than 200 stores, giving it a footprint that is two to three times bigger than its nearest rivals, Terry says. It's also adding new stores at an accelerating pace. "An intriguing company that's capitalizing on a fragmented market" is how Terry summarizes this pick. Zacks Investment Research has named Boot Barn one of "Five Top Multibagger Stocks to Buy in 2018," as reprinted in TalkMarkets.com.

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Callaway Golf

In addition to golf equipment, Callaway sells apparel that appeals to non-golfers, as well. In particular, Terry notes that its TravisMathew clothing label is fast-growing, with a widening distribution network, and he believes that it is likely to become "a lifestyle brand beyond sportswear," as Barron's puts it.

Terry anticipates that a huge boost to sales will come once the TravisMathew line is offered by big athletic goods chains such as Dick's Sporting Goods Inc. (DKS). Callway bought TravisMathew for $125.5 million in 2017, per Golf.com. Zacks Investment Research has named Callaway one of "3 Consumer Facing Growth Stocks To Buy For 2018," per TalkMarkets.com.

Duluth Holdings

This company is the parent of Duluth Trading Company, which has very limited risk from changes in fashion trends since it focuses on work wear. Terry expects that the company is near an "inflection point," with profits and cash flow poised to increase markedly. Moreover, he is encouraged by the earnings contribution from new store openings.

Duluth sells high-price, high-quality work wear exclusively through its own stores, catalog and website and has made an aggressive push to win more women as customers, per TalkMarkets.com, which believes that "the strength and future of the company rests with its approach to driving e-commerce sales."

American Eagle

American Eagle stock is up by 96% over the past year and should have further upside potential given that competitors in the teen-oriented retail sector have been closing stores.

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Tilly's

Tilly's has been a big disappointment so far in 2018, with a plummeting share price. Nevertheless, Terry sees a number of positives, besides "a clean balance sheet with a lot of cash and no debt, and a low multiple." These are: sales growth ready to accelerate once more; year-over-year sales growth at its brick-and-mortar locations; and an e-commerce business that is set to grow. He says approvingly that increased traffic in an existing base of stores "is hard to come by these days." Meanwhile, Quad 7 Capital Research, writing in TalkMarkets.com, calls Tilly's a "cream of the crop retailer, in a rebounding retail group, that will likely continue to be strong."