Shopping for Success: 3 Top Stocks in Consumer Discretionary Sector
The economy has been “on fire” following the effects of the COVID-19 pandemic. With GDP growth at 4.9% in Q3’23 and unemployment easing to 3.7% by November 2023, consumers have started to regain some spending power. And, with the holiday season closing, we might see another uptick in consumer spending. As investors, we want to search for companies that have been reporting stellar results and are poised to continue their growth trajectory. This article will examine three consumer discretionary stocks we think are a buy.
Consumer Discretionary Stocks: Mercado Libre Inc (MELI)
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Mercado Libre Inc (NASDAQ:MELI) is a Uruguay-based e-commerce Argentinian company that operates an e-commerce and online auctions similar to e-Bay. The company’s operations are focused on 18 countries in Latin America. MELI offers an integrated e-commerce service via its platform ecosystem. This includes payment and financial solutions, logistics for its shipping, advertising, and digital storefront. The company previously reported making another milestone by having the biggest Black Friday sales record in its history.
MELI recently announced its third-quarter results. It showcased Mercado Libre’s strong growth potential and decisive strategies, leading to solid results. The company also reported a 40% year-over-year growth in net revenue driven by impressive results from its operations in Mexico, Brazil, and Argentina. Looking closely at its segment performance, it garnered a 69.1% YoY growth in net revenue and 33% YoY growth in fintech revenue.
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Even with macroeconomic challenges in Argentina, the company’s revenue grew in no uncertain terms, highlighting its resilience and ability to maintain growth and promising investors stable long-term profitability. These factors have highlighted why MELI is our first consumer discretionary stock to buy right now.
G-III Apparel Group, Ltd. (GIII)
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G-III Apparel Group, Ltd. (NASDAQ:GIII) is a designer, manufacturer, and retailer of a range of apparel. Its products include dresses, sportswear, outerwear, suits, handbags, footwear, luggage, and other goods. G-III operates into two main segments: wholesale operations, which sells products to retailers under owned, licensed, and private label brands; retail segment, for its direct sales to consumer operations done in its retail store; and digital channels. Some of its known brands include DKNY, Karl Lagerfeld Paris, and Donna Karan.
While its third-quarter sales had a slight dip, its higher net income per diluted shares numbers and non-GAAP net income made up for it, with results increasing to $2.74 from $1.26 and $2.78 from $1.35, respectively. The company also highlighted that its strong wholesale segment performance and efficient inventory management were crucial to its success for this fiscal year.
G-III also appointed Dana Perlman as its new Chief Growth and Operations Officer. The company aims to push for its strategic increased brand expansion with its brands Halston, Nautica, Champion, and Donna Karan, which is to be led by Dana Perlman. The company has also raised its 2024 guidance for GAAP and non-GAAP net income per diluted share. This intense pursuit for growth and the numbers backing it up puts G-III in one of our top consumer discretionary stocks to buy before Christmas.
Airbnb, Inc. (ABNB)
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Airbnb, Inc. (NASDAQ:ABNB) is one of the most disruptive businesses in modern times. Its release helped reshape how tourists and travelers view lodging. Capitalizing on the “Sharing Economy” concept has challenged the hotel and lodging industry by offering unique accommodations. This gives homeowners the potential to earn income from their existing homes. Additionally, it provides consumers with a broader range of alternatives for their lodging. The company’s marketplace offers hosts and guests a platform to book accommodation for a fee during their travels worldwide. They opened travelers to lower-cost options compared to higher-end offerings from traditional hotels.
Airbnb has been experiencing a strong quarter with the robust travel season. Revenue grew 18% YoY, net income hit $4.4 billion, and earnings beat analysts’ forecasts by 14.9%. The company also reported a 19% increase in active listing YoY, pushing supply growth across regions to double-digits. Its strategy to focus on enhancing its core services, mainstream hosting, and expanding its reach in the international market resulted in a 14% increase in its nights and experiences bookings in areas previously under-penetrated, like the Asia Pacific, which experienced a 23% growth. With the holiday season on its way, Airbnb is poised to take advantage of the anticipated influx of travelers. That’s why I think it’s one of the best consumer discretionary stocks to buy.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.
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