Seven Retail Stocks on a Roll

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Overall, retail sales have sputtered in recent reports. But not all is doom and gloom in the sector; here are seven retail stocks that are on a tear. All of them hit 52-week highs yesterday, and all are up more than 20% since the beginning of the year (or in one case, since its IPO earlier this year).
Abercrombie & FitchANF
: The Ohio-based apparel retailer opened a flagship store in Paris in May, part of its efforts to expand the brand in Europe, with stores planned for Madrid and Düsseldorf. Revenues are projected to be up 18.4% this year, and the long-term EPS growth forecast is 16.3%. The share price is more than 32% higher year to date; the stock has outperformed competitors American Eagle
AEO
and The Gap
GPS
in that time.
America's Car-MartCRMT
: This used-car dealer operator reported a 16% revenue bump in its fiscal fourth quarter, 9% of it from same-store sales. The company also continues to buy back shares. Analysts predict revenues will rise 11% this year, and the long-term earnings per share growth forecast is 15%. Shares are more than 36% higher year to date. The stock has outperformed the car dealership industry average, as well as competitor CarMax
KMX
.
DSWDSW
: The discount footwear retailer plans to open 18 new stores in fiscal 2011, and it raised its outlook for the year in its better-than-expected first-quarter report. The return on equity is 18.6% and the long-term EPS growth forecast is 12.5%. The share price is more than 42% higher than at the beginning of the year. In that time, the stock has outperformed competitors Collective Brands
PSS
and Foot Locker
FL
, as well as the industry average.
ExpressEXPR
: Piper Jaffray reiterated its Overweight rating and price target on the stock yesterday. The apparel retailer has a market cap of $2.1 billion and a long-term EPS growth forecast of 18.5%. Sales are forecast to be up 7.6% this quarter, as well as up 8.2% for the current year. The share price is more than 26% higher than at the beginning of the year. The stock has outperformed competitor The Gap
GPS
and the industry average in that time.
GNC
GNC
: Jim Cramer is bullish on this purveyor of nutritional supplements, which has a market cap of 2.1 billion and went public in April. Analysts expect sequential growth of both per-share earnings and revenue in the next quarter. The long-term EPS growth forecast is 15.0%. The share price is up more than 38% since the IPO. The stock has outperformed competitors CVS Caremark
CVS
and Walgreen
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WAG
, as well as the broader markets, in that time.
Red Robin Gourmet BurgersRRGB
: The casual restaurant chain plans to open 10 new locations in 2011 and is expected to announce further expansion plans in its second-quarter report August 11. Revenues are forecast to be 5.3% higher this year, and the long-term EPS growth forecast is 13.1%. The share price is more than 76% higher year to date. The stock has outperformed competitors Brinker International
EAT
and DineEquity
DIN
in that time.
TJX CompaniesTJX
: JPMorgan recently raised its estimates on TJX, in part anticipating accelerating EPS growth in the second half. The company has raised its dividend for 15 straight years, and the yield is currently 1.1%. The P/E ratio is less than the industry average and the return on equity is 44.4%. The share price is about 27% higher year to date. The stock has outperformed competitor Kohl's
KSS
and the department store industry average in that time.
Action Items:Bullish:
Traders optimistic about the retail sector might want to consider the following trades:
  • First Trust Consumer Discretionary AlphaDEX Fund FXD: up nearly 43% in the past year
  • SPDR S&P Retail ETF XRT: up more than 45% in the past year
  • Vanguard Consumer Discretionary Index Fund VCR: up more than 34% in the past year
Bearish:
Traders pessimistic about the retail sector may want to consider this alternate position:
  • Proshares UltraShort Consumer Services SCC
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
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Posted In: Long IdeasSector ETFsShort IdeasRetail SalesRestaurantsTrading IdeasETFsabercrombie & fitchAmerican EagleAmerica’s Car-MartApparel RetailAutomotive RetailBrinker InternationalCarmaxCollective BrandsConsumer DiscretionaryConsumer Staplescvs caremarkDepartment StoresDineequityDrug RetailDSWExpressfoot lockerGNCKohl’sRed Robin Gourmet BurgersRestaurantsretail ETFsRetail StocksThe GapTJX Companieswalgreen
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