5 Stocks to Buy as Retail Sales Make Steady Rebound

Core Viewpoint - Consumers are reducing spending on discretionary items due to economic concerns, yet retail sales showed growth in February, indicating resilience in the retail sector and potential investment opportunities in retail stocks [1][3]. Retail Sales Performance - Retail sales increased by 0.2% in February, rebounding from a 1.2% decline in January, although it fell short of the 0.3% consensus estimate [3]. - Excluding autos, retail sales rose by 0.3%, with a year-over-year increase of 3.1% in February, driven by a 3.1% increase in online sales [4]. Economic Factors Impacting Retail - Consumer sentiment has been affected by economic uncertainty, higher prices, and tariff policies, but retail sales rebounded in the second half of 2024 after the Federal Reserve's interest rate cuts [5]. - Inflation showed signs of cooling in February, which is favorable for both the economy and the retail sector [6]. - The Federal Reserve is expected to resume rate cuts if inflation continues to decrease, which would benefit the retail sector [7]. Selected Retail Stocks - JD.com, Inc. (JD): Expected earnings growth rate of 7.5% for the current year, with a Zacks Consensus Estimate improvement of 4.6% over the past 60 days, currently holding a Zacks Rank 1 [8]. - Deckers Outdoor Corporation (DECK): Anticipated earnings growth rate of 21% for next year, with a 5.9% improvement in earnings estimates over the past 60 days, currently holding a Zacks Rank 2 [10]. - The Gap, Inc. (GAP): Expected earnings growth rate of 7.7% for next year, with a 9.7% improvement in earnings estimates over the past 60 days, currently holding a Zacks Rank 1 [11]. - Tapestry, Inc. (TPR): Expected earnings growth rate of 14.5% for the current year, with a 6.3% improvement in earnings estimates over the past 60 days, currently holding a Zacks Rank 2 [13]. - Urban Outfitters, Inc. (URBN): Expected earnings growth rate of 11.8% for the current year, with an 8.1% improvement in earnings estimates over the past 60 days, currently holding a Zacks Rank 2 [15].