3 American retail stocks to buy after the strong holiday season

By:
on Dec 28, 2021
  • America’s retail sales jumped during the holiday season.
  • Sales rose by about 8.5% between November 1 and December 24.
  • We highlight three retail stocks to buy.

US stocks jumped on Monday as investors reflected on the strong holiday sales data. Numbers by Mastercard showed that holiday sales jumped by 8.5% this year, with e-commerce sales rising by about 11%. So, in this article, we will look at some of the best retail stocks to buy for 2022.

Williams-Sonoma 

Williams-Sonoma (NYSE: WSM) is a leading American retailer that owns brands like Pottery Barn, Williams-Sonoma Home, and West Elm, among others. The company specializes in home products like cookware and electronics. Its brands mostly target the middle class. 

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The Williams-Sonoma stock price has risen by more than 56% in 2021 and by 274% in the past five years. This growth is attributed to several reasons. 

First, the company has been ahead of its time. For one, the management has been ahead of its time by focusing on e-commerce. Therefore, while WSM is a brick-and-mortar store, it makes more than 60% of its sales through e-commerce.

Second, demand for its products has increased substantially recently. For example, its total sales jumped by 16% to $2 billion in the last quarter and by 30% in the second quarter. 

Third, the company has brands to cater to all types markets. It has Pottery Barn kids for children and Williams-Sonoma for middle-aged women. Therefore, while the stock has done well in 2021, there is a likelihood that it will keep doing well in 2022.

Target

Target (NYSE: TGT) is one of the biggest American retailers valued at more than $107 billion. It has more than 1,800 stores across the country.

The Target stock price has jumped by 27% this year as demand for its products has risen. It has jumped by more than 233% in the past five years alone.

Target has benefited from the investments made by the company to boost its brand image. Its stores are well-arranged and attractive after the management invested billions to boost its image. It has also invested vastly in delivery channels like online delivery and pick-up. 

Target’s business has done well in 2021. Its revenue jumped by 13% to $25.65 billion in the last quarter. I expect that the stock will keep doing well in 2022.

Costco Wholesale

Costco (NASDAQ: COST) is the biggest wholesale brand in the country with a market capitalization of more than $250 billion. The company makes most of its profit from the membership fees that it takes from millions of customers.

The Costco stock price rose by more than 54% in 2021 and more than 275% in the past five years. This happened as its revenues and profitability jumped. The company also managed to procure ships to boost its Asian sourcing. The stock could keep rising as investors anticipate a small fee hike in the coming years.

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