There’s nothing easier than online shopping. Whether you’re buying a suit or a sandwich, you simply need to pick what you want to buy, enter your credit card information, and wait a bit for it to get to your home. With the future of drone deliveries on the way, online shopping is all but guaranteed to be even faster and simpler than it is now.
Brick-and-mortar stores know this, and they’re not really doing anything to help themselves. Sure, they have their own online shops, but that just cannibalizes sales from their physical locations. At the same time, Amazon and other online-only stores are offering the same products but with faster shipping, cheaper prices, and better perks like free returns. This is one of many reasons why the retail market is in the toilet right now.
Not all retailers, however, are closing locations and losing millions of dollars. Some retailers are actually thriving as the others close en masse. Their stocks are also performing fairly well, unlike, say, every other retail stock on the market. But how are these retailers staying afloat, and should you invest in them right now? Let’s take a look.
Amazon ($AMZN) is one of the main reasons why retail stores are doing so poorly right now. The Washington-based company, however, is doing exceptionally well. They’re not just store, mind you. They’re also a web host, the world’s biggest eBook seller, creators of the most popular connected speaker (Alexa), and many other things. While their stock is expensive to buy (currently $851.21), it has increased by 48.46% or $277.88 in the last year alone. Imagine how rich you would be if you bought it when it first launched?
Walmart ($WAL) is struggling to catch up to Amazon, and is now considered the lesser of the two companies. Yet Walmart is still a multi-billion-dollar retailer, people still rely on it, and they still billions of products each year. They’re not going anywhere for a long time, though their online offerings certainly need to catch up to Amazon if they want to continue growing.
When was the last time you went to a Sears, RadioShack, FYE, hhgregg, or any other electronics store that wasn’t Best Buy? If you’ve answered “not in a while,” that’s because Best Buy ran them out of business. The company does pretty well for themselves with online sales (though not at Amazon levels), gets decent foot traffic at their nationwide stores, and has been performing pretty well on the stock market. They still have to worry about competition from the aforementioned companies, but their stock grew by nearly 33% in the last year, so investors are still pretty positive on the company’s future.
Lowe’s and Home Depot
People still need to build stuff, fix their bathrooms, and redo their kitchens. Companies like Lowe’s ($LOW) and Home Depot ($HD) are doing well because of this fact. Their sales are up and foot traffic isn’t going down. They’ve also capitalized on the DIY craze in the last decade-plus by providing every tool and resource necessary to build pretty much anything. Both companies are constantly in competition with each other, and Home Depot is doing a tad bit better on the market. Yet with a lower price of entry and recent string of successes, Lowe’s could be a pretty attractive addition to your portfolio.
The Children’s Place
Clothing retailers are having some pretty hard times, but The Children’s Place ($PLCE) is doing better than most. In the last few years, the company closed down hundreds of stores, restructured their organization, announced a share buyback program, and increased dividends, all while beating their sales goals and analyst predictions. Since the beginning of the year, their shares increased by 16.3%. In the last year, the retailer’s shares increased by 66.1% while paying a total of .80$ dividend per share. If only Gap, JCPenney, Macy’s, Sears, American Eagle, and the rest of them could do that!
Should you invest in these retailers? Retail as a whole kind of stinks right now, yet these companies are the exception. Are they always going to be this way? For Amazon and Walmart, probably. Yet if the other four keep focusing on what they do best while beating earnings and pleasing shareholders, they’ll be around for a whole lot longer. If you think these companies will continue to grow, consider doing your research before investing in them. If you think these companies could be affected by the retail market’s downward trend, look elsewhere.