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Why retail stocks will continue to gain

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Photographic illustration by Sam Kelly; Dream time (3); Getty Images (1)


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Supply chain problems and inflationary pressures could linger longer than expected for retailers in 2022. But momentum is on their side and trends will help push retailer stock prices up in the new year. .

For starters, consumers have returned to malls, spending some of those surplus pandemic savings, even as a renewed Covid threat looms. And they now have an array of new shopping experiences and payment options.

“We were on this crazy online trajectory,” says Katie Thomas, a researcher at the management consultant Kearney Consumer Institute. “Now it’s really about figuring out what the whole store experience looks like and how to engage with consumers across the different channels. »Think about partnerships, such as


Ulta Beauty

(ticker: ULTA) opening “shops in a store” locations in


Target

(TGT) stores.

The most successful retailers are those who have seamlessly merged their digital operations with physical stores, explains Thomas.


Warby parker

(WRBY), the eyewear supplier that started its online business, is set to open 35 new physical stores in 2021, and it plans to open more in the new year. Warby went public in September and the stock is up 11.53% from its benchmark IPO price of $ 40.


Walmart

(WMT) has raised its outlook for same-store sales growth in the United States for fiscal 2022, maintaining its strategy of keeping prices low as buyers face inflation. The company overcame supply chain issues ahead of this year’s vacation by chartering its own ships, redirecting them to less congested ports and hiring more workers.


Home deposit

(HD) and


Lowe’s

(LOW) will continue to benefit from the surge in buying and home renovations. Oppenheimer said in a report that the outlook for both retailers remains strong even as consumers seek to return to normal life in 2022. Home Depot has an average estimate of earnings per share of $ 16.12 for the calendar year 2022, up from $ 15.16 this year, according to FactSet. Lowe’s is expected to earn $ 12.82 per share next year, down from $ 11.71 this year.

During this time,


Nike

(NKE) bet the future of retail is in the metaverse. He bought RTFKT, which creates unique virtual sneaker designs for discerning gamers. Expect more retailers to jump in: Luxury digital hybrid collectibles could represent a $ 25 billion segment in a $ 300 billion non-fungible token market by 2030, Morgan Stanley estimates.

Discover the future of these sectors in 2022

Write to Logan Moore at [email protected]