{"id":172183,"date":"2020-06-02T19:43:17","date_gmt":"2020-06-02T19:43:17","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=172183"},"modified":"2020-06-02T19:43:17","modified_gmt":"2020-06-02T19:43:17","slug":"top-3-retail-stocks","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/","title":{"rendered":"Main Street: Top 3 Retail Stocks to Buy During the Reopening"},"content":{"rendered":"<p>By now, provinces and states across North America are deep into reopening. The long lines to enter shops and to pick-up items ordered online tell the story. It&#8217;s the perfect time to write about the top retail stocks to buy during the reopening.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#Retail_stocks_out_of_hibernation\" >Retail stocks out of hibernation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#What_are_customers_looking_for\" >What are customers looking for?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#Top_Retail_Stocks_1_Aritzia_ATZ-T\" >Top Retail Stocks #1: Aritzia (ATZ-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#Top_Retail_Stocks_2_Canadian_Tire_CTC-T\" >Top Retail Stocks #2: Canadian Tire (CTC-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#Top_Retail_Stocks_3_Ross_Stores_ROST-Q\" >Top Retail Stocks #3 : Ross Stores (ROST-Q)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/stockchase.com\/discover\/top-3-retail-stocks\/#What_are_the_Top_3_Retail_Stocks_to_buy_during_the_reopening\" >What are the Top 3 Retail Stocks to buy during the reopening?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Retail_stocks_out_of_hibernation\"><\/span>Retail stocks out of hibernation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Retail stocks, though, are still limited by social distancing with stores capping the maximum number of shoppers at all times, and there remains the possibility of a second wave close their doors again.<\/p>\n<p>Some areas are open than others, but retail has finally unlocked its doors and after a long and painful hibernation.<\/p>\n<p>We dig into the top retail stocks to buy as (of this writing) restaurants and bars are in the earliest stages of reopening, so forecasting their fates is premature.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_are_customers_looking_for\"><\/span>What are customers looking for?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p lang=\"en-CA\">Judging by downtown Toronto, there is pent-up consumer demand for hardware, leisure products (such as bicycles), barbecues and clothes. Keeping these caveats in mind, here&#8217;s a look at three retail stocks that show promise.<\/p>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-120672\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2019\/11\/Aritzia-1-760x254.jpg\" alt=\"Top Retail Stocks : Aritzia\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Retail_Stocks_1_Aritzia_ATZ-T\"><\/span>Top Retail Stocks #1: Aritzia (ATZ-T)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ATZ-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ATZ-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/>Before the pandemic, this Vancouver-based fashion retailer topped many investors&#8217; buy lists, and now it continues to stand out because of its strong social media following.<\/p>\n<p><span lang=\"en-CA\">Approaching <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.instagram.com\/aritzia\/?hl=en\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">one million Instagram followers<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\">, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> shoppers (fans, really) constantly post selfies to show off their latest <\/span><span lang=\"en-CA\"><i>#<a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a><\/i><\/span><span lang=\"en-CA\"> purchase. <\/span><span lang=\"en-CA\">Their clothes are affordable and attract a wide audience. There are 96 <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritizia<\/a> stores, three-quarters being in Canada with the rest in the States. <\/span><\/p>\n<p><span lang=\"en-CA\">To compare, the <a href=\"https:\/\/stockchase.com\/company\/view\/537\/GPS-N\">Gap<\/a> boasts three million Instagram followers and operates 3,500 stores worldwide. <\/span><span lang=\"en-CA\">Relatively speaking, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a>&#8216;s social media presence overshadows its more-established peer\u2014and the results are paying off. <\/span><\/p>\n<p><span lang=\"en-CA\">Last week, the Vancouver-based company <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/finance.yahoo.com\/news\/aritzia-reports-financial-results-fourth-200100836.html\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">released its Q4<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> ending March 1, 2020, on the eve of the lockdown. Net revenue rose 6.3% and comparable sales grew 8.9%; full year increases came in at 12.2% and 7.6%, respectively.\u00a0<\/span><span lang=\"en-CA\">However, the report also stressed that after the lockdown, the chain drove its e-commerce operation hard, which resulted in online revenue growth of 150% YOY. \u00a0<\/span><span lang=\"en-CA\">About 30 stores will reopen by May 31 and pent-up demand is encouraged by summery weather. <\/span><\/p>\n<p><span lang=\"en-CA\">Before the pandemic, analyst <a href=\"https:\/\/stockchase.com\/expert\/view\/1415\/Jamie-Murray\">Jamie Murray<\/a> saw a large runway for <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> to expand locations across the U.S., but those plans will likely be delayed. <\/span><\/p>\n<p><span lang=\"en-CA\">In fact, the company is <\/span><span style=\"color: #000080;\"><span lang=\"zxx\"><u><a href=\"https:\/\/www.vancourier.com\/aritzia-inc-expects-45-drop-in-net-revenue-in-first-quarter-due-to-covid-19-1.24143082\" target=\"_blank\" rel=\"noopener\"><span lang=\"en-CA\">warning investors of a 45% drop<\/span><\/a><\/u><\/span><\/span><span lang=\"en-CA\"> in Q1 revenue ending May 31. To fight this decline, management is pouring more resources online by testing a new Clientele App to connect with its top customers and to track their purchases and profiles, shares styles and drive traffic to its online business. <\/span><\/p>\n<p><span lang=\"en-CA\">In other words, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> is doing all the right things a fashion retailer should in this difficult, unpredictable environment. <\/span><span lang=\"en-CA\">It helps that <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritizia<\/a>&#8216;s customers are passionate and loyal, so the company&#8217;s online sales should continue to rise. <\/span><\/p>\n<p><span lang=\"en-CA\">Compared to the TSX, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> stock in the last three months was -21% vs. the index&#8217;s -6.7%, but in May, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritizia<\/a> outperformed the exchange 9.5% vs. 2.5%. \u00a0<\/span><span lang=\"en-CA\">More store reopenings should accelerate business. <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritzia<\/a> is good for the long-term.<\/span><\/p>\n<p><span lang=\"en-CA\"> On Monday, <a href=\"https:\/\/stockchase.com\/company\/view\/5384\/ATZ-T\">Aritizia<\/a> popped nearly 4%. It pays no dividend and trades at 22.5x.<\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-medium wp-image-172330\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/CTC-T-1-760x254.jpg\" alt=\"Top Retail Stock : Canadian Tire\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Retail_Stocks_2_Canadian_Tire_CTC-T\"><\/span>Top Retail Stocks #2: Canadian Tire (CTC-T)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"CTC-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/CTC-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/>It puzzled me that this Canadian icon was not deemed essential during the lockdown, though <a href=\"https:\/\/stockchase.com\/company\/view\/379\/DOL-T\">Dollarama<\/a> was, given the wide overlap in goods offered.\u00a0No doubt, the <a href=\"https:\/\/finance.yahoo.com\/news\/canadian-tires-profit-slumps-stores-103019595.html\" target=\"_blank\" rel=\"noopener\">closures will hit<\/a> the Tire&#8217;s Q1 and Q2.<\/p>\n<p lang=\"en-CA\">Also, the debt they carry concerns analysts such as <a href=\"https:\/\/stockchase.com\/expert\/view\/1385\/Jason-Del-Vicario\">Jason del Vicario<\/a>.\u00a0However, since the chain reopened, consumers are flocking back.<\/p>\n<p lang=\"en-CA\">In the second half of May, the stock jumped from $94 to $117. Empirical evidence explains why. In the first days of reopening, one downtown Toronto location saw huge lines for pick-ups as well as in-stores stretch around the corner.<\/p>\n<p lang=\"en-CA\">Timing helps. It&#8217;s spring and Canadians are gardening, upgrading their patios, repairing sheds, painting and buying BBQs, bicycles and camping equipment.<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/company\/view\/327\/CTC-T\">Canadian Tire<\/a> supplies all these products. Further, with almost nobody taking vacations, Canadians will staycation, explore the outdoors and lounge in their yards.<\/p>\n<p lang=\"en-CA\">True, the Tire&#8217;s online shopping operation still woefully lags its competitors, such as <a href=\"https:\/\/stockchase.com\/company\/view\/1355\/WMT-N\">Walmart<\/a>.<\/p>\n<p lang=\"en-CA\">That said, even analysts who are lukewarm on the name deem its 3.84% dividend safe in a time when many divvies have been suspended. The stock trades at a 10.5x PE. \u00a0Not a screaming buy, but <a href=\"https:\/\/stockchase.com\/company\/view\/327\/CTC-T\">CTC<\/a> is definitely one to consider and counts among the safer bets.<\/p>\n<p lang=\"en-CA\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-172328\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/ROST-Q-1-760x254.jpg\" alt=\"Top Retail Stock: Ross Stores\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Top_Retail_Stocks_3_Ross_Stores_ROST-Q\"><\/span>Top Retail Stocks #3 : Ross Stores (ROST-Q)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ROST-Q stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ROST-Q\/chart?labels=tru\" width=\"125\" align=\"right\" \/>At no other time does the retailing maxim <i>location, location, location <\/i>matter more than now. <a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross Stores<\/a> is an American discount retailer that buys excess inventory from big department stores like <a href=\"https:\/\/stockchase.com\/company\/view\/1808\/JWN-N\">Nordstrom<\/a> (think Winners).<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> is largely found in strip malls. Given social distance, strip malls encourage shopping distinctively more than enclosed shopping malls. (Witness the trickle of customers inside Toronto&#8217;s Eaton Centre so far.)<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> also benefits because many of its stores are located near <a href=\"https:\/\/stockchase.com\/company\/view\/1227\/TGT-N\">Target<\/a> locations. \u00a0An essential retailer which is often packed on the weekends, <a href=\"https:\/\/stockchase.com\/company\/view\/1227\/TGT-N\">Target<\/a> is going out of its way to be <a href=\"https:\/\/finance.yahoo.com\/news\/target-ceo-we-want-to-be-the-safest-place-to-shop-in-america-180606787.html\" target=\"_blank\" rel=\"noopener\">safe, sanitary places<\/a> for customers, and these efforts are paying off in sales.<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/finance.yahoo.com\/news\/how-toilet-paper-and-hand-sanitizer-may-surprisingly-save-ulta-tjx-ross-stores-162054914.html\" target=\"_blank\" rel=\"noopener\">Goldman Sachs notes<\/a> that retailers like <a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> which are located near essential stores like <a href=\"https:\/\/stockchase.com\/company\/view\/1227\/TGT-N\">Target<\/a>, will \u201cbenefit from a faster recovery of sales.\u201d <a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> enjoys high margins and low debt. Since May 14, <a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> stock has climbed from $81 to $97 (currently trading at a 21x PE).\u00a0That&#8217;s a 20% move already, but there&#8217;s likely a little more room left to climb as reopenings continue and the sun shines.<\/p>\n<p lang=\"en-CA\"><a href=\"https:\/\/stockchase.com\/company\/view\/3472\/ROST-Q\">Ross<\/a> pays no dividend.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_Top_3_Retail_Stocks_to_buy_during_the_reopening\"><\/span>What are the Top 3 Retail Stocks to buy during the reopening?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>We have chosen Aritzia (ATZ-T), Canadian Tire (CTC-T) and Ross Stores (ROST-Q) as the Top 3 Retail Stocks to buy during the COVID-19 reopening.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By now, provinces and states across North America are deep into reopening. The long lines to enter shops and to pick-up items ordered online tell the story. It&#8217;s the perfect time to write about the top retail stocks to buy [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":172329,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-172183","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/172183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=172183"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/172183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/172329"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=172183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=172183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=172183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}