5 Stocks to Buy as Retail Sales Jump Despite Lingering Inflation

Core Viewpoint - Retail sales in the United States have shown a positive trend, rising for the second consecutive month in March, indicating a potential investment opportunity in retail stocks [1][3]. Retail Sales Performance - Retail sales increased by 1.4% month-over-month in March, following a 0.2% rise in February, exceeding the consensus estimate of 1.2% [3]. - Year-over-year, retail sales grew by 4.6% in March, with sales excluding autos rising by 0.5% month-over-month, surpassing analysts' expectations of 0.3% [4]. - Specific sectors such as sporting goods, hobby, and music stores saw a 2.4% increase, while food and drinking places rebounded by 1.8% in March [4]. Economic Context - Concerns over tariffs announced by President Trump have affected consumer sentiment, with fears of increased commodity prices and potential economic recession [5]. - Trump imposed a 25% import duty on foreign-made cars and a 10% baseline tariff on all trading partners, leading to significant market losses initially, but a 90-day halt on reciprocal tariffs has since improved market conditions [6]. Retail Sector Outlook - The retail sector is expected to benefit from the Federal Reserve's potential resumption of interest rate cuts, which could support consumer spending as inflation shows signs of decline [7]. Selected Retail Stocks - eBay Inc. (EBAY): Expected earnings growth rate of 8.4% for the current year, with a Zacks Rank of 2 [9]. - JD.com, Inc. (JD): Expected earnings growth rate of 11.3% for the current year, holding a Zacks Rank of 1 [11]. - The Gap, Inc. (GAP): Expected earnings growth rate of 7.7% for next year, with a Zacks Rank of 1 [12]. - The Kroger Co. (KR): Expected earnings growth rate of 6% for next year, currently holding a Zacks Rank of 2 [13]. - Tapestry, Inc. (TPR): Expected earnings growth rate of 14.7% for the current year, with a Zacks Rank of 2 [15].