TJX - Retail Stocks With Eye-Popping Growth Potential
2020 made its mark in history thanks to COVID-10 that turned the world upside down. And yet, amid all this chaos and turmoil, some retail stocks still managed to thrive. They are the e-commerce giant Amazon (NASDAQ: AMZN), discount chain Ollie’s Bargain Outlet (NASDAQ:OLLI) and furniture retailer Lovesac (NASDAQ:LOVE).
Ollie’s Bargain Outlet
Extreme discount operates 366 stores in only 23 states, so it’s not exactly a world-renowned brand-name. But it generated $1.4 billion in fiscal 2020 sales and Wall Street is forecasting the retailer to hit $2.1 billion by fiscal 2023. Like TJX Companies (NYSE: TJX), its business model has been literally built for the recession as it seeks out excess inventory to sell to the end consumer at a substantially discounted price. Therefore, Ollie’s is providing renowned brand at bargain prices at a time when consumers are facing a weakened purchase power due to job losses and cash cuts. Moreover, its loyal customer base counts approximately 9 million members and although loyalty programs don’t necessarily turn out as expected, this figure shows the company is doing a good job at keeping its customer happy.
Lovesac
The foam-filled furniture maker is arguably one of the fastest-growing retail stocks on the planet. Wall Street forecasts its sales will skyrocket from $233 million in fiscal 2020 to $462 million in only four fiscal years. What is Lovesac’s secret? It offers products that stand out to millennials, the generation that everyone wants to appeal to. Moreover, Lovesac managed to increase its sales with sets which boost margins. Its e-commerce ecosystem showed great resiliency to the pandemic, as during the quarter that ended at the beginning of May, Lovesac’s total revenues increased by almost a third from the same period last year, being fueled with an increase of 258.3% (yes, you read right) in online sales. This growth alone is likely to tick company’s profit box until its fiscal 2022.
Amazon
It is impossible to speak about successful online retail without speaking of Amazon that seems to have its footprint in every single profitable ecosystem. But Amazon is foremost an e-commerce company that is responsible for as much as 44% of online sales in the US, being followed by Walmart Inc (NYSE: WMT) with mere 7%, according to Bank of America. Wall Street expects Amazon’s yearly revenues to amount to $572 billion by 2023. It has more than 150 million Prime users which allows the e-commerce giant to beat brick-and-mortar retailers in pricing while offering a superior delivery in comparison to other online retailers. With retail alone, Amazon conquered Mont Everest, and we didn’t even mention its other star segments, such as its AWS cloud kingdom and push into streaming. Simply put, there’s Amazon and then there’s everyone else.
Outlook
Brick-and-mortar retailers at large are fighting for dear life as the landscape of traditional retail has being changed for good with the new normal still being in the making. Meanwhile, this trio of retail stocks is succeeding big-time without sacrificing their eye-popping growth potential. Their performance is merely a confirmation of a truth we all know too well – any problem can be seen as an opportunity in disguise. These three companies caught the right wave at the right time and this is why they are surfing their way and thriving even throughout an unprecedented downturn.
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