The retail sector has taken a big hit from the ongoing trade war between the world’s largest two economies. The rugged macroeconomic conditions have sent some retail stocks to trade at the lowest forward multiples Wall Street has seen in years. For example, stocks like Nordstrom JWN, L Brands LB, and Urban Outfitters URBN are trading at their lowest forward multiples in around a decade. Are the recently battered retail stocks poised for a comeback or should investors vacate the sector completely? Let’s take a look at some stocks that can provide solid entry points for a potential comeback run.
DSWDBI is currently trading 9.24X its forward earnings, which is below the industry average of 11.24X. DBI also boasts a PEG ratio of 0.62 that exhibits standout growth potential as its ratio is also below the 1.28 industry average. Current quarter consensus estimates forecast the shoe and accessory retailer’s bottom line to pop 18.57% to $0.83 per share on top of a revenue projection of 14.21% to $951.4 million. The stock also offers a high dividend yield of 5.72% that provides shareholders solid quarterly relief. DBI is listed as a Zacks Rank #3 (Hold) with a Style Score of B in Growth.
Shoe CarnivalSCVL is another stock trading at a low forward multiple that has some solid growth upside. Our current quarter consensus estimates anticipate the firm to bring in $274.6 million in sales and report EPS of $0.90 for respective gains of 2.01% and 18.42%. Looking ahead to the full fiscal year, Shoe Carnival is projected to report a 13.47% jump in earnings and a 0.17% hike in net sales to $1.03 billion. Shoe Carnival is a Zacks Rank #2 (Buy) and has surged over 30% in the past four weeks after reporting a robust Q4, making it seem like it may be poised to outperform its valuation.
ZumiezZUMZ is an additional stock that is coming off a spectacular quarter; earnings skyrocketed 100% and net sales rose 4.32% to $228.4 million. Zumiez has been on an absolute tear this year, rising 58.7% in 2019 and has a whopping 60.92% average EPS surprise over its past four reported quarters. The shoe retailer’s full fiscal year looks bright, and estimates forecast the firm’s bottom-line to climb 20.67% to $2.16 per share and for net sales to grow 4.45% to $1.02 billion. Estimate trends also look good for the firm as they have been revised higher over the past 90-days across the board earning it a Zacks Rank #1 (Strong Buy).
Ralph LaurenRL is a stock that has made some solid gains recently, rising 8.6% over the last four weeks. The apparel giant is currently trading at 12.24X its forward earnings, which is below its industry average of 14.9X. Current quarter consensus estimates forecast earnings to climb 5.75% to $2.39 per share, while retail sales are expected to jump 2.64%, driving revenue to a projected $1.7 billion. Ralph Lauren has beaten our earnings estimates the last 18 quarters straight with an average EPS surprise of 9.55%. RL currently sports a Zacks Rank #3 (Hold).
GenescoGCO has popped 9.5% over the past four weeks after posting a solid Q2 where comps rose 3% and earnings skyrocketed. GCO also currently trades at a discount relative to its industry. While the company has struggled with Y/Y sales growth, GCO has had a robust earnings trend, boasting a 332.56% average EPS surprise over the past four quarters. Consensus estimates project the company to continue its bottom-line growth, with earnings growing 15.79% to $1.10 per share. Earnings revisions look solid as they have been revised higher across the board, earning GCO a Zacks Rank #1 (Strong Buy).
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Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Nordstrom, Inc. (JWN) : Free Stock Analysis Report
L Brands, Inc. (LB) : Free Stock Analysis Report
Zumiez Inc. (ZUMZ) : Free Stock Analysis Report
Shoe Carnival, Inc. (SCVL) : Free Stock Analysis Report
Genesco Inc. (GCO) : Free Stock Analysis Report
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
DSW Inc. (DBI) : Free Stock Analysis Report
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