COVID-19 was supposed to be the death knell for brick-and-mortar retailers. But many that remained open thrived – 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 last year.
With less competition, some of the surviving brick-and-mortar retailers picked up the slack, even thrived, during the age of social distancing that only recently has begun to thaw. As a result, many brick-and-mortar retail stocks are rising faster than they have in years.
After cratering last March (-8.2% from February) and April (-14.7% from March), retail sales have bounced back in a big way since stay-at-home orders were lifted, jumping 18.3% last May, 8.4% in June and improving slightly in each of the four months that followed. They dipped again when winter arrived, bringing with it new record cases that didn’t peak until late January. U.S. retail sales were down in November, December and especially February.
But as Covid cases have fallen sharply as more Americans get vaccinated, America’s great reopening is underway. You see it in the retail sales: this March, they were up 10.7%, though they were unexpectedly flat in April. Still, Americans are raring to get out and go places after months of quarantine and social distancing, and a lot of them have been flocking to their nearest hardware store, clothing store or restaurant. And the national chain stores that have the most locations and the widest reach have benefited greatly from the rush back to physical retailers.
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Up and up and up…
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Near their absolute PEAK… with the juice squeezed out of them.
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10 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:
L Brands (LB): 82.8% growth
Camping World Holdings (CWH): 51.6% growth
Deckers Outdoor Corp. (DECK): 49.7% growth
Tractor Supply Company (TSCO): 42.5% growth
Thor Industries (THO): 36.2% growth
Home Depot (HD): 32.7% growth
Lowe’s (LOW): 24.1% growth
Williams-Sonoma (WSM): 24.2% growth
Target (TGT): 23.4%
Best Buy (BBY): 11.5% growth
Not coincidentally, shares of those retailers have shot up of late. Let’s look at the year-to-date share price gains in those 10 brick-and-mortar retail stocks:
Every single one of these 10 brick-and-mortar retail stock has managed to top the 12% gain in the S&P 500 so far this year. They range from large caps to small caps (CWH), from restaurant and fast-food chains to home improvement stores, kitchenware, electronics, women’s fashion, camping equipment, 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, as America comes out of its collective yearlong hibernation. 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.
If you invested in any of these 10 stocks this year, you’ve made good money. And with the economy recovering and consumer confidence improving, their runs might be far from over.
Do you own any brick-and-mortar retail stocks? Tell us about them!
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!
*This post has been updated from an original version, published in 2020.