COVID-19 was supposed to be the death knell for brick-and-mortar retailers. But many that have remained open are thriving – and so are these retail stocks.
Brick-and-mortar retailers were already dying a slow death. Then COVID happened, expediting the process in the cruelest of ways, forcing once-mighty retailers like Brooks Brothers, J. Crew, J.C. Penney, Lord & Taylor, Neiman Marcus and Pier 1 to all file for bankruptcy in the last five months.
With less competition, some of the surviving brick-and-mortar retailers have picked up the slack, even thrived, during the age of social distancing. As a result, many brick-and-mortar retail stocks are rising faster than they have in years.
After cratering in March (-8.2% from February) and April (-14.7% from March), retail sales have bounced back since stay-at-home orders have been lifted, jumping 18.3% in May, 8.4% in June and 1.2% in July. Americans were raring to get out and go places after two months of quarantine, and a lot of them flocked to their nearest hardware store, clothing store or restaurant. And the national chain stores that have the most locations and the widest reach benefited greatly from the rush back to physical retailers.
The only, and I repeat, the only flaw I can see in this stock is that few investors know about it. Yet, it is making money hand over fist behind the scenes and it has been for years.
Why, long before COVID-19 hit, this stock was on a tear, handing investors 100% more profits than Amazon, Apple, Facebook and Google—that’s 230% to 76%, 105%, 16% and 32%, respectively.
This company’s market leadership will continue for years to come.For details, click here.
15 Brick-and-Mortar Retail Stocks Crushing the Market
Check out some of the strong sales results reported by large public brick-and-mortar retailers in their most recent quarter:
Tractor Supply Company (TSCO): 35% growth
Lowe’s (LOW): 32.8% growth
Wingstop (WING): 31.7% growth
Home Depot (HD): 23.4% growth
Papa John’s (PZZA): 14.1% growth
Camping World Holdings (CWH): 9% growth
Deckers Outdoor Corp. (DECK): 2.3% growth
Not coincidentally, shares of those retailers have shot up in recent months. Let’s look at the year-to-date share price gains in those seven brick-and-mortar retail stocks:
Every single one of them has at least quadrupled the 2020 gain (5.8%) in the S&P 500 so far this year. They’ve even outpaced the 14% gain in retail stocks as a group, as measured by the SPDR S&P Retail ETF (XRT), which includes online retailers like Overstock.com (OSTK) and Etsy (ETSY) among its largest holdings.
Other brick-and-mortar retail stocks have outperformed despite more mixed sales and earnings. Lululemon (LULU) shares are up 63%; L Brands (LB) is up 62%; Pool Corp. (POOL) is up 57%; Chipotle (CMG) is up 50%; Domino’s Pizza (DPZ) is up 43%; Thor Industries (THO) is up 42%; Williams-Sonoma (WSM) is up 35%; Best Buy (BBY) is up 33%.
That’s 15 brick-and-mortar retail stocks, all outperforming both the market and the retail sector as a whole by a wide margin. They range from large caps to small caps (PZZA and CWH), from restaurant and fast-food chains to home improvement stores, athletic apparel, kitchenware, electronics, women’s fashion, camping equipment, swimming pools, tractors and recreational vehicles. And unlike Amazon, all of them have physical locations you can buy from.
Who knows what the coming months will hold for the economy and the retail landscape as a whole. A lot of that will depend on how quickly America can put out the coronavirus fires. Regardless, the narrative that the virus and the accompanying shutdowns would be the last nail in the coffin for brick-and-mortar retailers has been resoundingly debunked, at least for now.
If you invested in any of these 15 stocks this year, you’ve made good money. And with the economy recovering and consumer confidence improving, their runs might be far from over.
Investment analyst and Chief Analyst of Cabot Wealth Daily, Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.Sign up now!