4 consumer stocks for your watchlist this week
Top consumer stocks for your March 2022 watchlist
As we move into earnings season, consumer stocks may be worth a closer look in the stock market. This is largely thanks to a number of major retailers which released their quarterly financial statements this week. As such, some investors may keep their eyes peeled. On top of that, we also recently released the Personal Consumption Expenditure (PCE) report. Namely, the report showed that consumer spending accelerated faster than expected, rising 2.1% in January from the estimate of 1.6%. Seeing that consumers continue to spend despite this period of sharply rising inflation, some investors may turn to these consumer stocks.
For example, Kroger (NYSE: KR) The stock is in focus following an upgrade from Telsey Advisory Group. Telsey said the market doesn’t give the retailer enough credit for its sales efforts across digital channels. Analyst Joseph Feldman upgraded the stock to “Outperform” on confidence in the company’s multi-year omnichannel growth track. Beside this we have Hormel Foods (NYSE: HRL) with quarterly earnings and revenue that beat consensus estimates. CEO Jim Snee said “Our foodservice operations had another outstanding quarter, demonstrating the value of our direct selling organization and our differentiated product portfolio.“That said, do you have that list of the best consumer stocks to buy on the stock market today?
Consumer stocks to buy [Or Sell] Today
Target is a general merchandise retailer that operates through its stores and digital channels. Its stores offer a range of food assortments, including perishables, dry groceries, dairy products and frozen products. Customers can also purchase these items through the company’s digital channels. In fact, Target operates over 1,900 stores in the United States and employs over 400,000 employees. Over the past year, TGT’s stock has risen more than 25%.
This month, the retailer released its latest quarterly and full-year 2021 results. To start, the company generated around $106 billion in total revenue for the full year. This indicates growth of nearly $28 billion or 35% over the past two years. Along with that, Target also achieved GAAP earnings per share of $3.21, a new all-time high. Earnings per share a year earlier were $2.73, down 17.8%. Total net profit for the year was approximately $6.95 billion, up an impressive 59% from $4.37 billion a year ago.
Apart from that, the company plans to invest up to $5 billion this year. Accordingly, the investment will be invested in new physical stores, renovations, new brands and the expansion of its online footprint. This will help Target further drive sales growth and differentiate itself from competitors. Given Target’s impressive performance, is TGT stock a buy?
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Following this, we have Kohls, a leader in omnichannel distribution. With over 1,100 stores in 49 states, Kohl’s is the largest department store chain in the United States as of December 2021. The company also has an impressive e-commerce platform at Kohls.com. Plus, there’s the Kohl’s app that features amazing national and exclusive brands for families nationwide. It is also uniquely positioned to deliver on its strategy as the trusted retailer of choice for active and casual lifestyles. Impressively, KSS stock is up around 14% year-to-date amid a period of market turmoil.
This month, Kohl’s released its fourth fiscal quarter financial statements. Starting with revenue, that number was around $6.5 billion, up from $6.14 billion in 2020. Turning to earnings, the retailer raked in earnings per share of $2.20 dollars, beating analysts’ estimates of $2.12. The company attributes this to its strategy of attracting new customers and selling more products at full price.
Kohl’s also managed to deliver an operating margin of 8.6% two years ahead of its 2023 plan. Notably, this was a direct result of its efforts to restructure the business to be more profitable. Other than that, the company expected net sales for 2022 to grow 2% to 3% year-over-year. Given Kohl’s performance over the past quarter, is KSS stock worth looking at?
Another consumer stock on this list to watch is Nordström. Essentially, it is a retailer of luxury clothing, footwear, accessories, and cosmetics, among others. The company operates through multiple retail channels, boutiques and also online. Currently, Nordstrom operates approximately 100 stores in 32 US states and three Canadian provinces. For an idea of scale, the company had about 62,000 employees last year.
This month, Nordstrom reported fourth quarter results in line with the company’s 2021 outlook. Diving, total net sales for the quarter were up 23% year over year. Impressively, digital sales accounted for 44% of total sales during the quarter. This represents a 23% growth in digital sales from fiscal 2019. The company also reported net income of $200 million, a substantial jump from $33 million in the same period. last year. This is mainly due to the increase in sales volume and gross margin.
Aside from the results, Nordstrom also provided its financial outlook for fiscal year 2022. Among other things, it expects revenue growth, including retail sales and credit card revenue, of 5% to 7% compared to fiscal 2021. He also expects his earnings per share to be between $3.15 and $3.50. All things considered, is JWN stock worth watching?
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Finally, we have Costco, the members-only big-box retail store that many of us are probably familiar with. After all, it is the go-to store when consumers want to purchase items in bulk. Costco sells a variety of products ranging from dry foods and sundries to consumer durables and fresh foods. In fact, the average Costco warehouse is about 146,000 square feet. Over the past year, COST stock has risen more than 50%.
The big-box retailer announced its fiscal 2022 second-quarter results this month. In short, Costco exceeded consensus expectations in nearly every category. The company reported total revenue of $51.9 billion and EPS of $2.94 per share. For reference, this compares to Wall Street forecasts of $51.47 billion and $2.74 respectively.
Additionally, billionaire investor Charlie Munger recently reiterated his confidence in the company. He firmly believes that Costco will do well in the long run and has no intention of selling his stake. On top of that, he also believes Costco has the potential to dominate as an online player as well. In its fiscal year 2021 report, Costco’s online sales jumped 44% year-over-year. Given Munger’s confidence in the company, would you buy COST stock?
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