Five retail stocks to watch ahead of Black Friday

November 22, 2022 05:08 AM PST | By Rupam Roy
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  • Total retail gallons of Murphy USA (MUSA) rose over 13 per cent YoY in Q3 FY22.
  • Genuine Parts (GPC) noted a surge of over 17 per cent YoY in its latest quarter net sales.
  • Ulta Beauty (ULTA) will report its Q3 FY22 earnings results on December 1 at 3:30 PM CT.

The investors might be keeping a close track of the retail stocks, with the shopping or holiday season in focus.

The recent inflation data for October also showed that the inflation has cooled off lately, which has also raised consumer confidence. On the other hand, retail sales also remained strong despite the hawkish approach by policymakers to curb inflation.

The US consumer stock is one of the market's major segments, comprising some largest companies from different industries. The sectors range from EVs, and e-commerce, to automotive parts retailers and department store operators.

Some of the major names from the US consumer retail sector include Dillard's, Inc. (NYSE: DDS), Murphy USA Inc. (NYSE: MUSA), Genuine Parts Company (NYSE: GPC), Ulta Beauty, Inc. (NASDAQ: ULTA), and TJX Companies, Inc. (NYSE: TJX).

Meanwhile, the recent set of economic data showed that retail spending remained stable amid the cooling inflation, raising the traders' spirits who were anticipating an economic downturn or a recession.

Black Friday is on November 25 this year, the first day after Thanksgiving and is considered among the biggest shopping days of the year. The Black Friday shopping figures would provide cues to the investors about the recent consumer sentiments and how much the consumers are opening their wallets amid the holiday season.

Dillard's, Inc. (NYSE: DDS)

The upscale department store operatory Dillard's Inc's dividend yield was 0.22 per cent. The stock of the US$ 6.14 billion market cap firm, which sells several items like apparel, shoes, cosmetics, handbags, etc., surged over 46 per cent YTD and around four per cent YoY.

The company's Board had announced a quarterly cash dividend of US$ 0.2 apiece on its Class A and Class B common stock, payable on January 30 next year. In addition, it has declared a special dividend of US$ 15 apiece on its Class A and Class B common stock.

The company said the special dividend follows its "strong financial performance" in the starting quarter three quarters of 2022. The special dividend of US$ 15 per share would be payable on January 9, 2023.

In Q3 FY22, Dillard's Inc's net income totaled US$ 187.9 million, which was 12.2 per cent of its net sales of US$ 1.54 billion in the quarter. This compares to a net income of US$ 197.3 million, representing 13.3 per cent of its net sales of US$ 1.48 billion in Q3 FY21.

Murphy USA Inc. (NYSE: MUSA)

The major retail gas station chain operator, Murphy USA's dividend yield was 0.48 per cent. The El Dorado-based gasoline stations' stock surged over 45 per cent YTD and around 58 per cent YoY while touching its 52-week high of US$ 323 on October 31, 2022.

The company's total retail gallons rose 13.2 per cent YoY to 1.2 billion gallons in Q3 FY22. Meanwhile, the company said it had opened seven new Murphy Express stores in the latest quarter, which bumped up its quarter-end store count to 1,700. In addition, it reopened 10 raze-and-rebuild Murphy USA stores in the third quarter, it said.

Murphy USA's net income totaled US$ 219.5 million, or US$ 9.28 per share diluted in Q3 FY22, an increase from US$ 104 million, or US$ 3.98 per diluted share in Q3 FY21.

Genuine Parts Company (NYSE: GPC)

Genuine Part is an American distributor of automotive replacement parts, office, and other related products, and its dividend yield was 1.99 per cent. The stock of the Atlanta-based office and other related industrial suppliers rose about 29 per cent YTD and around 33 per cent YoY.

Genuine Parts Company's sales rose 17.8 per cent YoY to US$ 5.7 billion in Q3 FY22, and its diluted EPS was up 38.4 per cent YoY to US$ 2.20 apiece in the quarter.

Ulta Beauty, Inc. (NASDAQ: ULTA)

The beauty salon company, Ulta Beauty's market cap was US$ 22.56 billion during writing. The American beauty store chain operator's stock price surged about seven per cent YTD and around eight per cent YoY.

The Bolingbrook-based firm said it will report its Q3 FY22 earnings results on December 1, 2022, at 4:30 pm ET/3:30 pm CT.

Meanwhile, in Q2 FY22, Ulta Beauty Inc's total sales were US$ 2.3 billion, up from US$ 2 billion in Q2 FY21, while its comparable sales rose 14.4 per cent YoY. The beauty salon firm's diluted EPS totaled US$ 5.70 per share in the last quarter, against US$ 4.56 in Q2 FY21.

TJX Companies, Inc. (NYSE: TJX)

The major off-price departmental store operator, TJX Companies, is based in Framingham. The stock of the off-price retailer of apparel and home fashions jumped about three per cent YTD and around seven per cent YoY.

TJX Companies noted a three per cent slump in its Q3 FY22 net sales of US$ 12.2 billion, and its total segment profit was US$ 1.47 billion, against US$ 1.54 billion in Q3 FY21.

Five US retail stocks and their recent stock performanceSource: ©Kalkine Media®; © Canva via

Bottom line:

The US consumer or retail segments were no expectation amid the hovering woes that the overall market went through the year. The S&P 500 consumer discretionary sector plummeted over 32 per cent on a year-to-date basis, compared with a fall of over 16 per cent of the broader index.

Meanwhile, according to Commerce Department's report from last week, US retail sales rose in October as consumers have increased their spending on motor vehicles and other goods.

The strong data has also raised optimism among the market participants, that the economy could avoid falling into a potential recession that was expected earlier in the coming days.

The report showed that the US retail sales advanced 1.3 per cent in October, after being unchanged in the prior month, while on a YoY basis, the total sales rose 8.3 per cent.

The higher gasoline prices have bolstered the strong gains in the sales data. Meanwhile, online retail sales rose by over 1.2 per cent, while furniture store sales increased by 1.1 per cent. However, the store sales for electronics and other appliances fell 0.3 per cent in the month.

Now, the National Retail Federation estimates that holiday sales to increase as much as eight per cent in 2022, a decline from the advance of 13.5 per cent in the prior year. However, the data is still higher than the 4.9 per cent average increase in the last sten years.


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