4 Stocks to Buy as E-Commerce Sales Continue to Soar
E-commerce sales are growing at a rapid pace even though the retail sector is struggling amid soaring commodity prices. Although a certain percentage of consumers still prefer visiting traditional brick-and-mortar stores, the pandemic has changed the way people have shopped for so long.
E-commerce has not only been driving retail sales but also the number of online shoppers over the past three years. Given this scenario, retail stocks with a strong online presence are expected to benefit in the near term.
E-Commerce Sales Growing
The pandemic changed the way of shopping, with most people preferring to purchase goods online as brick-and-mortar stores remained closed and millions avoided making social contact. This not only saw direct-to-consumer sales explode during the pandemic but also saved the retail sector from collapse.
The online shopping trend has since continued, with the number of online shoppers in the United States increasing by a solid 30%.
According to the Quarterly Retail E-commerce Sales released by the Census Bureau, total e-commerce retail sales hit $1,034.1 billion in 2022, up 7.7% from the prior year. This came as overall retail sales jumped 8.1% year over year in 2022.
E-commerce sales in 2022 accounted for 14.6% of overall retail sales in the United States.
The jump in online shoppers and sales is impressive given that people despite having the option of buying online preferred visiting brick-and-mortar stores, till the pandemic changed their shopping habits.
In fact, during the peak of the pandemic, people bought approximately 70% of their groceries online. E-commerce sales accounted for 16.4% of overall retail sales in the second quarter of 2020.
Online sales declined somewhat as the economy started reopening. However, e-commerce still accounted for 15.1% of total retail sales at the end of 2020, 14.6% by the end of 2021, and 14.6% by the end of 2022.
Another sector that has transformed is transportation, which is closely related to e-commerce. According to data from the Bureau of Transportation Statistics, transborder freight shipped by all means of transportation moved $140.3 billion in August 2022, an increase of 24.1% from August 2021. Trucking freight, which is most correlated with e-commerce, rose by 15.9% from August 2021 to August 2022.
Given that people have now realized the comforts and benefits of shopping online, e-commerce is poised to grow in the near term. According to the Statista Digital Market Outlook, revenues from online shopping in the United States is projected to grow to $1.7 trillion by 2027.
This is, thus, the right opportunity to invest in retail stocks that have a strong online presence.
American Eagle Outfitters, Inc. AEO is a specialty retailer of casual apparel, accessories and footwear for men and women aged 15-25 years. AEO, along with its subsidiaries, engages in the designing and marketing of casual clothing. American Eagle Outfitters’ assortment includes jeans, cargo pants, graphic T-shirts as well as a range of accessories, outerwear and footwear.
American Eagle Outfitters’ expected earnings growth rate for the current year is 15.5%. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the past 60 days. AEO presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Casey's General Stores, Inc. CASY operates convenience stores under the Casey's and Casey's General Store names in 16 Midwestern states, mainly Iowa, Missouri and Illinois. CASY also operates two stores under the name "Tobacco City," selling primarily tobacco and nicotine products, one liquor store, and one grocery store.
Casey's General Stores expected earnings growth rate for the current year is 27.5%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. CASY currently carries a Zacks Rank #2.
DICK'S Sporting Goods, Inc. DKS operates as a major omni-channel sporting goods retailer, offering athletic shoes, apparel, accessories and a broad selection of outdoor and athletic equipment for team sports, fitness, camping, fishing, tennis, golf and water sports, among others. DKS offers these items through a blend of associates, in-store services and unique specialty shop-in-shops.
DICK'S Sporting Goods’ expected earnings growth rate for the current year is 10%. The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the past 60 days. DKS currently carries a Zacks Rank #2.
General Mills, Inc. GIS 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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