The retail industry provides a variety of finished goods, both durable and non-durable, to individual consumers and households. The industry also sells services. Products sold by retail companies include apparel, electronics, furniture, kitchenware, sporting goods, books, and toys. Some even sell groceries, pharmaceutical products, auto parts, and gardening supplies. The industry includes traditional brick-and-mortar retailers as well as emerging e-commerce companies. Some of the biggest retail companies include Walmart Inc. (WMT), Amazon.com Inc. (AMZN), and Costco Wholesale Corp. (COST). The earnings and revenue performance of retailers has varied widely during the COVID-19 pandemic. Many heavily focused brick-and-mortar retailers have suffered huge declines, while retailers with a strong e-commerce presence have thrived.
Retail stocks, as represented by the SPDR S&P Retail ETF (XRT), have significantly outperformed the broader market. XRT has provided a total return of 212.5% over the past 12 months, well above the Russell 1000's total return of 66.1%. These returns reflect a significant recovery of the broader stock market since the bottoming out of the bear market in late March, 2020. The benchmark figures are as of March 12 and all statistics in the tables below are as of March 15, 2021.
Here are the top 3 retail stocks with the best value, the fastest operating income growth, and the most momentum.
These are the retail stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Retail Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Companhia Brasileira De Distribuição ( CBD)||4.46||1.2||3.0|
|Big Lots Inc. ( BIG)||68.67||2.5||4.3|
|Qurate Retail Inc. ( QRTEA)||13.03||5.3||4.6|
- Companhia Brasileira De Distribuição: Brazil-based Companhia Brasileira De Distribuição is a retailer of food, electronics, clothing, and similar items. The company operates chains of supermarkets, department stores, and other retail shops throughout Brazil.
- Big Lots Inc.: Big Lots offers an assortment of merchandise, including consumables, seasonal products, furniture, electronics, housewares, toys, and more mainly through its brick-and-mortar stores. For its Q4 FY 2020, ended January 30, 2021, Big Lots reported a 4.5% year-over-year (YOY) increase in net income and 8.1% YOY net sales growth. The company also announced that Q4 FY 2020 saw record comparable sales growth.
- Qurate Retail Inc.: Qurate Retail is an e-commerce service provider. The company partners with television networks and e-commerce sites, social media, mobile applications, and similar outlets to provide video and digital commerce services worldwide. Qurate operates brands including QVC, HSN, zulily, and Frontgate, among others.
These are the retail stocks with the highest YOY operating income, also called operating earnings, growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Operating income excludes non-operating income and expenses (such as investment gains or losses), one-time items, as well as interest and taxes. This helps investors get a clearer picture at the strength of the underlying business without the effect of unusual one-off events, such as large tax credits, asset sales, or lawsuit settlements. If you decided to invest in a company, it's still important to look at these one-off non-operating expenses and incomes, as they can still influence a company's overall financial health.
|Fastest Growing Retail Stocks|
|Price ($)||Market Cap ($B)||Operating Income Growth (%)|
|Big 5 Sporting Goods Corp. ( BGFV)||14.90||0.3||1,740|
|Crocs Inc. ( CROX)||81.63||5.3||925.6|
|At Home Group Inc. ( HOME)||29.82||1.9||724.1|
- Big 5 Sporting Goods Corp.: Big 5 Sporting Goods Corp. is a sporting goods retailer selling shoes, apparel, accessories, and equipment for a variety of activities. The company operates retail shops serving customers in the western U.S. The company saw net income grow more than 59-fold YOY for Q4 FY 2020, ended January 3, 2021, while net sales increased by 19.0% YOY. Net income growth was partly fueled by a favorable insurance settlement and a reduction in deferred tax asset valuation allowance.
- Crocs Inc.: Crocs is a shoe designer and manufacturer. The company sells shoes for men, women, and children through a variety of retail chains.
- At Home Group Inc.: At Home Group operates a chain of U.S. home decor superstores selling home furnishings, decor, rugs, furniture, and housewares to customers across the U.S. At Home Group, which operated 222 outlets at the end of February, announced plans to open 12 to 15 new stores in 2021 as part of a new expansion strategy.
These are the retail stocks that had the highest total return over the last 12 months.
|Retail Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GameStop Corp. ( GME)||264.50||18.5||6,550|
|LifeMD Inc. ( LFMD)||18.14||0.5||3,480|
|Kirkland's Inc. ( KIRK)||24.90||0.4||2,990|
|SPDR S&P Retail ETF (XRT)||N/A||N/A||212.5|
- GameStop Corp.: GameStop operates a chain of electronic game and software stores nationwide. The company sells video game hardware, software, and accessories.
- LifeMD Inc.: LifeMD, formerly Conversion Labs, is a telehealth company. It provides cloud-based multi-point video conferencing services and telehealth platform services for remote cares as well as prescription medications and over-the-counter products. On March 5, the company issued a preliminary report for Q1 2021, ending March 31. LifeMD anticipates quarterly revenue growth of nearly 300% YOY, driven by subscriptions, which represent about 80% of revenue.
- Kirkland's Inc.: Kirkland's is a U.S. retailer of home accessories including framed art, candles, lamps, rugs, and holiday merchandise. In Q4 2020, the company posted net income of $20.7 million compared to a loss of $4.9 million in the same quarter a year earlier. Kirkland posted this profit increase even as net sales declined by 6.9% YOY in Q4, when the COVID-19 pandemic hurt sales at its brick-and-mortar stores, many of which were temporarily closed. For the same time period, e-commerce grew by 35.5%. The company attributed record earnings for the quarter to its merchandise assortment and earnings leverage from cost and infrastructure changes.
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YCharts. "Financial Data." Accessed Mar. 15, 2021.
Big Lots Inc. "Big Lots Reports Record Full Year Performance." Accessed Mar. 15, 2021.
Big 5 Sporting Goods Corp. "Big 5 Sporting Goods Corporation Announces Fiscal 2020 Fourth Quarter and Full Year Results." Accessed Mar. 15, 2021.
At Home Group Inc. "At Home Resumes Growth Strategy with Four New Locations in February." Accessed Mar. 15, 2021.
LifeMD Inc. "LifeMD Q1 2021 Revenues on Track to Exceed $17 Million, up 295%, with Subscriptions Representing More than 80% of Total Revenue." Accessed Mar. 15, 2021.
Kirkland's Inc. "Kirkland's Reports Fourth Quarter 2020 Results." Accessed Mar. 15, 2021.