Recent Goldman Sachs research suggests that consumers are likely to spend more money on their holiday shopping in 2018 than they will do by 2023.
Not all retail stores are the same.
Certain retailers have historically experienced a greater boost in sales during the holidays.
Two retail stocks are particularly appealing investments for Black Friday.
Over the last ten years, both have consistently performed better than their competitors in December.
Bath & Body Works Inc (NYSE: BBWI)
Bath & Body Works stock (BBWI), which has been a strong performer this month and in the past, suggests that further gains could be possible for December.
Retail stocks have consistently gained over 8% at the end of every year since 2021.
BBWI’s third quarter financial results exceeded Wall Street expectations, which adds to the appeal of its services.
Bath & Body Works raised its guidance for the full year on November 25, expressing confidence that it could navigate a volatile retailer environment, and take advantage of holiday sales.
In the press release on earnings, CEO Gina Boswell said that this optimistic outlook was due to the “strong execution” and “momentum we are building.” She also reiterated the commitment of the company to long-term sustainable profitable growth.
BBWI’s supply chain is largely based in the United States.
Analysts at TD Cowen believe that this domestic focus combined with its growth strategy could push the stock price to $42 before the end of the year.
This price goal represents an upside of up to 20% from the current level.
BBWI also offers a dividend yield of 2.26%, which makes it a good option for investors looking to earn passive income.
Abercrombie & Fitch Co (NYSE: ANF)
Abercrombie & Fitch Co., despite a recent drop of over 10% in the last month, exhibits a historic trend of gains of up to 3%.
Positive financial results for the clothing retailer further enhance its recovery potential.
Abercrombie & Fitch surpassed Wall Street’s expectations on Tuesday for the third fiscal quarter.
The company increased its forecast for the quarter due to the anticipated holiday season. It now expects sales growth up to 7%, which is higher than the analysts’ 4.8% estimate.
In a recent press release, CEO Fran Horowitz said that “our teams are ready and engaged to provide for our customers during this holiday season. We have the goal of sustainable profit growth in sight.”
Abercrombie & Fitch analysts currently expect an average gain of more than 25% on the stock.
ANF does not offer a current dividend, in contrast to Bath & Body Works. ANF’s shares, which recently broke through their 50-day average moving price, have just broken above this level.
The post, Top 2 Retail Stocks to Buy Before Black Friday, may change as new information becomes available.
