E-Commerce Sales Set to Hit New Highs: 4 Stocks to Buy
E-commerce has played a major role in driving retail sales ever since the onset of the pandemic. Although life has bounced back to normal, the spending habit of consumers has changed drastically over the past couple of years, with an increasing number of people shopping online.
Be it consumer staples, discretionary items, or consumer durable goods, people are today more confident making their purchases online. This has also made retailers’ online shopping and delivery arms stronger. Given this scenario, stocks like Tapestry, Inc. TPR, Costco Wholesale Corporation COST, Conagra Brands, Inc. CAG and General Mills, Inc. GIS are likely to benefit in the near term.
Online Shopping Boosts Retail Sales
The Commerce Department reported that retail sales rose 3% month over month in January, surpassing economists’ expectations of a jump of 1.9%. E-commerce once again played a major role in driving overall retail sales, as online sales grew 1.3% month over month.
E-commerce has emerged as the most popular mode of shopping. Millions of people chose to shop from home throughout the pandemic due to fears of contracting the COVID-19 virus. They finally understood the benefits of online purchasing as a result of this. Since then, the tendency has prevailed and significantly aided the retail industry.
This comes as e-commerce retail sales crossed the $1 trillion mark for the first time in 2022. According to ComScore’s annual State of Digital Commerce report, online sales hit $1.09 trillion in 2022, climbing 11% from $904.3 billion recorded in 2021. Overall online sales increased 18% year over year in the fourth quarter.
E-Commerce Poised to Grow
People have been shopping online for years but e-commerce got a boost only after the pandemic, and since then, it has been capturing more market share almost every day. According to a Forbes report, 20.8% of overall retail purchases are expected to be done online in 2023.
A physical presence is thus no longer a top priority, with retailers shifting focus toward having a solid web presence that will allow a low barrier to entry for consumers. The report also mentions that 24% of retail purchases will be online by 2026.
E-commerce sales are expected to grow 10.3% in 2023, while the global e-commerce market is poised to hit $6.3 trillion in 2023. The U.S. e-commerce market, in particular, is expected to hit $8.1 trillion by 2026.
The report further mentions that the big brands will continue to dominate the online space. At present, Amazon.com, Inc. AMZN accounts for 37.8% of the overall online sales, followed by Walmart, Inc. WMT, Apple, Inc. AAPL and eBay, Inc. EBAY.
Our Choices
This is, thus, the right opportunity to invest in retail stocks that have a strong online presence.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrances and watches.
Tapestry’sexpected earnings growth rate for the current year is 7.2%. The Zacks Consensus Estimate for current-year earnings has improved 2.5% over the past 60 days. TPR presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Costco Wholesale Corporation sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. Costco is one of the largest warehouse club operators in the United States. COST also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia.
Costco Wholesale Corporation’s expected earnings growth rate for the current year is 18%. The Zacks Consensus Estimate for current-year earnings improved 0.8% over the past 60 days. COST has a Zacks Rank #2.
Conagra Brands, Inc. is one of the leading branded food companies in North America. CAG offers premium edible products with a refined focus on innovation. Conagra Brands maintains a highly dynamic product portfolio and incorporates alterations within it as per the preference pattern of the end-users.
Conagra Brands’ expected earnings growth rate for the current year is 12.7%. The Zacks Consensus Estimate for current-year earnings has improved 9% over the past 60 days. CAG presently sports a Zacks Rank #1.
General Mills, Inc. is a global manufacturer and marketer of branded consumer foods sold through retail stores. GIS also serves the foodservice and commercial baking industries. General Mills’ principal product categories include ready-to-eat cereals, convenient meals, snacks (including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks), super-premium ice creams, as well as baking mixes and ingredients.
General Mills’ expected earnings growth rate for the current year is 6.1%. The Zacks Consensus Estimate for General Mills’current-year earnings has improved 1.5% over the past 60 days. GIS has a Zacks Rank #2.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
eBay Inc. (EBAY) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
Conagra Brands (CAG) : Free Stock Analysis Report
Tapestry, Inc. (TPR) : Free Stock Analysis Report
