LVMUY - 3 Retail Stocks to Buy Now: June 2024

2024-06-23 08:00:00 ET

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Retail stocks to buy now are still worth betting on despite the economic headwinds.

The last few years have put the retail industry through the wringer, weighing down company valuations. Initially, the pandemic forced widespread shutdowns and drove countless retailers into bankruptcy. We saw a brief phase of ‘revenge shopping’ thereafter. But it was quickly overshadowed by the most severe inflation spike in four decades.

Hence, the retail investing landscape remains fraught with challenges, especially as the Fed continues maintaining interest rates near multi-year highs. The current financial environment forces consumers to tighten their belts, complicating things for retail businesses.

Despite the turbulence, these three standout retail stocks are bucking the trend, offering healthy upside potential. They’ve remained resilient in the face of the current economic tremors. Furthermore, they continue to deliver strong operating results while rewarding their shareholders handsomely in the process.

Walmart (WMT)

Walmart (NYSE: WMT ) continues to prove naysayers wrong as it stamps its authority in the retail space. Despite being up against inflationary pressures and other economic headwinds, it continues to grow its top-and-bottom lines at an impressive pace.

In its most recent quarterly showing, sales were up 6% year-over-year ( YOY ) , led by breathtaking growth in its eCommerce wing. Revenue from eCommerce jumped 21% YOY, with the retail titan concluding the quarter with a superb $5.1 billion in net income.

A lot of the firm’s success is linked to its competitively priced products, while it continues boosting its eCommerce capabilities to stay ahead of the competition. Additionally, the firm has enriched its customer experience with Walmart+, a subscription service offering perks like quick checkout and free delivery. On top of that, its advertising segment also continues firing, marked by a solid 24% YOY increase.

Also, you can’t forget its trusted dividend, which it recently bumped by 9% , marking its 51st consecutive year of dividend growth.

Costco (COST)

Costco (NASDAQ: COST ) has been one of the biggest stars in the retail sector, and, like Walmart, it has impressively expanded its online presence.

As a veteran in the big-box retail space, the firm effectively leverages its membership business model and cost-effective strategies to maintain its competitive pricing power. Consequently, it operates a stable business, with its top-and-bottom-line metrics near their historical averages. In addition, it has been a highly rewarding investment, yielding more than 825% in total returns to its shareholders.

Recently, Costco’s standout performance in the eCommerce arena has grabbed headlines with its stellar revenue surge. For Q3 of fiscal year 2024, the retail giant reported a commendable 9.1% increase in net sales, reaching $57.4 billion, with eCommerce sales surging by 20.7% YOY.

Moreover, in expanding its eCommerce presence, it plans to increase its warehouse count to 890 by the end of the year, up 3.3% from the prior year. These savvy measures underscore Costco’s commitment to growth and accessibility, solidifying its market position despite the challenges.

LVMH Moet Hennessey Louis Vuitton (LVMUY)

LVMH Moet Hennessey Louis Vuitton (OTCMKTS: LVMUY ) is arguably one of the top go-to picks in the luxury retail space. Housing brands like Louis Vuitton and Christian Dior has effectively maintained and built brand affinity. And, its disciplined approach to managing its pricing strategies and product expansions has safeguarded its premium appeal. Despite the inflationary pressures impacting discretionary spending, LVMUY’s results have held up remarkably well, boasting robust double-digit profitability metrics.

In recent years, LVMH has sought to expand its influence beyond high-end fashion into luxury experiences. This transformative move is exemplified by its collaboration with global hospitality giant Accor (OTCMKTS: ACCYY ) to rejuvenate the historic Orient Express brand.

This move entails opening new hotels, trains and sailing ships, efficiently diversifying LVMH’s massive portfolio. Additionally, LVMH’s strategic acquisition of the Belmond brand just before the pandemic highlights its bold dive into luxury hospitality. Therefore, this further infuses its retail portfolio with supreme travel experiences.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

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