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The Zacks Analyst Blog Highlights: Amazon, Best Buy, Kroger, Shoe Carnival and Dillard???s

Zacks Equity Research
Zacks.com featured highlights include: Ralph Lauren, Estee Lauder, GMS, CytRx and T2 Biosystems

For Immediate Release

Chicago, IL –July 17, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Amazon AMZN, Best Buy BBY, The Kroger Co. KR, Shoe Carnival, Inc. SCVL and Dillard’s, Inc. DDS.

Here are highlights from Monday’s Analyst Blog:

Brick & Mortar Stores Take on Prime Day: 4 Hot Picks

As Amazon Prime Day is round the corner, brick-and-mortar retailers are looking for ways to compete with the astounding sales that are almost scaling near the “Black Friday” level. Brick-and-mortar retailers are coming up with an array of special offers and discounts to attract customers and lessen Amazon Prime Day’s impact.

This calls for investing in retailers poised to gain from their promotional sales campaigns during this Amazon Prime Day event.

How Prime Day Affects Retailers

This year’s Prime Day starts off on Jul 16 and wraps up on Jul 17. This will include over 1 million deals, more than 50% compared to the year-ago period. Amazon is expected to generate $3.6 billion in sales on Prime Day this year, which will mark the biggest annual sales event ever, per Wall Street pundits. Prime Day, in fact, has already grown from $900 million in sales in 2015 to $2.41 billion in 2017.

Daniel Ives, head of research for the marketing insights firm GBH Insights, estimated that 60-70% of all the items on Amazon.com will be on a discount. Amazon is, further, offering its Prime members a $10 credit for spending $10 at Whole Foods Market stores. Amazon also doubled the cash-back bonus for Amazon Prime Rewards Visa card holders from 5% to 10%, provided they shop at Whole Foods. These schemes are part of the online giant’s efforts to build business at Whole Foods.

The Prime Day event has been quite a success story for Amazon, but, it does affect the weekly rhythm of traffic to brick-and-mortar retailers. Sarah Spangle, director of communications at Foursquare, has estimated a drop of less than 1% foot-traffic at electronic stores to some 3% at department stores around earlier Prime Day events. PlaceIQ also added that brick-and-mortar retailers do feel the heat on Prime Day.

The figures show the foot-traffic changes during the Sunday to Tuesday time period for a regular week, and the Prime Day week.

Retailers Hit Back on Prime Day

Brick-and-mortar retailers, thus, have found ways to counter the online retailer’s spectacular annual sales event. They have started to plan their own promotional events around Prime Day. Target, in particular, is offering free two-day shipping on orders over $35 and a 5% discount for REDcard holders. Shoppers who spend more than $100 on the Jul 17 sale will get a free six-month membership for Shipt-powered same-day delivery.

Kohl’s Corporation, for example, is giving 15% off on every online purchase and $10 Kohl’s cash for every $50 spent. Kohl’s is also luring customers to buy its charge card by offering an additional 30% off on the first purchase made. 

Additionally, Macy's has started to host Black Friday in advance by offering savings on items across the store. Grocers have also joined the big sales offer, with Kroger giving its customers $100 in digital coupons for organic items and Sprouts Farmers Market, Inc. offering up to 35% off on more than 600 items. These offers are aimed at competing directly with Whole Foods Market stores.

Other notable big retailers are offering a slew of sales and special offers, include Best Buy, Walmart, Nordstrom Inc. and GameStop Corp., to name a few. Best Buy is offering same price as that of Amazon on the same product, Walmart has begun its back-to-school sales, Nordstorm is offering access to its anniversary sale and GameStop has started its Game Days Summer Sales on video games.

4 Top Gainers

As brick-and-mortar retailers prepare to lessen the impact of Amazon Prime Day with a wide range of sales and special offers, it won’t be a bad proposition to invest in them now. We have, thus, selected four such stocks that can make the most of the Prime Day event. These stocks also flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Best Buy operates as a retailer of technology products, services and solutions. Currently, the company has a Zacks Rank 2. In the last 60 days, seven earnings estimates moved north, while one moved south for the current year. The Zacks Consensus Estimate for earnings rose 2% in the same period. The stock has outperformed the broader industry so far this year (+10.8% vs +8%).

The Kroger Co. manufactures and processes food products for sale in its supermarkets. The company has a Zacks Rank 2. In the last 60 days, eight earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings increased 2.4% in the same period. The stock has outperformed the broader industry in the year-to-date period (+2.2% vs -9.3%).

Shoe Carnival, Inc. operates as a family footwear retailer in the United States. The retail chain is turning its attention to boosting its online offerings. But, the company’s vice president of digital, Kent Zimmerman, did mention that they are offering the option to pick items offered online from stores. In this process, customers will visit the brick-and-mortar stores.

The company currently has a Zacks Rank 1. In the last 60 days, two earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings rose 5.7% in the same period. The stock has outperformed the broader industry so far this year (+23.3% vs -0.5%). You can see the complete list of today’s Zacks #1 Rank stocks here.

Dillard’s, Inc. operates retail department stores primarily in the Southeastern, Southwestern, and Midwestern areas of the United States. Dillard’s is presently offering deals such as spend $60, save $20 on beauty products to counter the Amazon Prime Day craze.

The company currently has a Zacks Rank 2. In the last 60 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings advanced 4.6% in the same period. The stock has outperformed the broader industry in the year-to-date period (+42.5% vs +32.2%).

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Shoe Carnival, Inc. (SCVL) : Free Stock Analysis Report
 
Best Buy Co., Inc. (BBY) : Free Stock Analysis Report
 
Dillard's, Inc. (DDS) : Free Stock Analysis Report
 
The Kroger Co. (KR) : Free Stock Analysis Report
 
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