Shoppers To Splurge This Thanksgiving Weekend: 5 Picks
Zacks Investment Research | Nov 19, 2018 06:07AM ET
Thanksgiving to Cyber Monday is going to be an excessively busy shopping season, at stores and online. Retailers are thus poised to see a substantial uptick in sales.
In fact, upbeat economic conditions and a two-decade high consumer confidence are proving conducive for retailers. So, it goes without saying that retail stocks are solid bets for now.
Millions Plan to Shop Over 5-Day Thanksgiving Weekend
Per the annual survey recently released by the National Retail Federation and Prosper Insights & Analytics (NRF), retailers are preparing for one of the most extravagant weekends of the year. An estimated 164 million plan to go shopping this Thanksgiving Day through Cyber Monday.
The NRF survey showed that nearly 21% (34 million) are planning to shop during the Thanksgiving Day, 41% (67 million) are expected to shop on Small Business Saturday and 20% (32 million) will shop on Sunday. The shopping weekend will come to end on Cyber Monday, with almost 46% (75 million) expected to make the most of online bargains. But, it’s Black Friday that will be the busiest with 71% (116 million) expected to splurge.
The NRF and Prosper Insights & Analytics reports added that consumers are willing to spend average of $1,007.24 during the upcoming holiday season, up 4.1% from the projection of $967.13 for last year.
Why Consumers Are Willing to Spend More
Matthew Shay rightly said that “thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we've seen over the past year.”
In the last two quarters, the U.S. economy recorded the fastest six-month growth in four years and is on track to hit the Trump administration's annual growth target of 3%. If that happens, it would be the best yearly performance since 2005, two years before the Great Recession.
The U.S. economy got a boost in the third quarter, with GDP increasing at an annualized pace of 3.5%, per the U.S. Commerce Department. In fact, the country’s total output of goods and services followed an even stronger 4.2% growth in the second quarter.
At the same time, consumers in America are currently most confident in almost two decades, courtesy of a healthy labor market. Their assessment of present-day conditions is encouraging, making them confident of continued economic expansion, at least in the near term.
The consumer confidence index climbed to 137.9 last month from 135.3 in September, per the Conference Board, a business research organization.
5 Top Retail Picks for Now
Taking the expected bumper holiday weekend sales into account, retailers are undoubtedly set to witness a strong year-end rally. Hence, it will be prudent to invest in five of the best retail stocks for handsome returns. Such stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Shoe Carnival (NYSE:CCL), Inc. (NASDAQ:SCVL) operates as a family footwear retailer in the United States. The company currently has a Zacks Rank #1. The Zacks Consensus Estimate for earnings rose 10.2% in the past 60 days. The company’s expected earnings growth rate for the current year is 59.8% compared with the Zacks Investment Research
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