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The Zacks Analyst Blog Highlights: Foot Locker, Genesco, MarineMax, Ulta Beauty and Sally Beauty

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For Immediate Release

Chicago, IL – June 3, 2021 – 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: Foot Locker, Inc. FL, Genesco Inc. GCO, MarineMax, Inc. HZO, Ulta Beauty Inc. ULTA and Sally Beauty Holdings, Inc. SBH.

Here are highlights from Wednesday’s Analyst Blog:

Retail Stocks to Play the Great Reopening

Last week, the BEA released personal income and expenditure numbers for the month of April. Although it looks like income is declining (real disposable personal income or DPI dropped 15.1% in April) and expenditures are moving in the same direction (real personal consumption expenditures, or PCE dropped 0.1%, with the goods component dropping 1.3% and the services component increasing 0.6%), this is not a negative situation. And that is evident from the release itself.

First of all, the decline in real income appears to be coming from a scale-down in the American Rescue Plan Act of 2021 (relative to March 2021), as well as decreases in payments from the Pandemic Unemployment Compensation program (again, relative to March). Some states are disincentivizing people from staying home by refusing unemployment benefits.

So, the government is nudging people who can’t work from home to get back on the job. This was always a possibility to get the economy back on its feet.

Second, the personal savings rate for April was 14.9%. Although down significantly from the 2020 highs, this is higher than it’s ever been before that, going back up to 1960. So it’s obvious that people are still preferring to save rather than spend.

And a look at the PCE details tells us a little bit more about what they’re doing. So when we’re saying that spending on goods went down, it’s worth noting that the decline was broad-based in the non-durable category, and led by food and beverages.

Also, durable goods expenditures actually increased, as people increased spending on motor vehicles and parts. On the services side, the increase came from recreation services, food and accommodation.

So basically, people are saying that they’ve had just about enough of staying home, and especially cooking at home. They’re more than willing to go out when they can to eat, travel and have a bit of fun. While some may be worrying about inflation, the numbers indicate that people feel they have the cash to let their hair down.

The Conference Board’s Consumer Confidence Index for May is 117.2, down marginally from 117.5 in April. Survey results indicate that consumers are highly optimistic about the present situation and believe that the good times won’t last indefinitely (naturally, since everyone expects the government payouts to stop soon). And the expectations index, which fell from 107.9 last month to 99.1 this month can hardly be considered disappointing.

All this is, of course, good news for retail, restaurants, apparel/shoes, fitness, recreation, beauty, etc industries. So here are a few great stocks from these hot segments that are worth picking up today-

Foot Locker

New York-based Foot Locker is a retailer of athletic shoes and apparel. The company operates websites and mobile apps, aligned with store brand names: footlocker.com, ladyfootlocker.com, six02.com, kidsfootlocker.com, champssports.com, footaction.com, footlocker.ca, footlocker.eu, footlocker.com.au, runnerspoint.com, sidestep-shoes.com, footlocker.hk, footlocker.sg, and footlocker.my.

As of Jan 30, 2021, the company operated 2,998 stores across 28 countries in North America, Europe, Asia, Australia and New Zealand. It also has 127 franchised Foot Locker stores in the Middle East.

It’s a member of the Retail - Apparel and Shoes industry, which is in the top 17% of Zacks-classified industries.

The Zacks Rank #1 (Strong Buy) company with Value and Growth Scores of A and Momentum Score of B topped first quarter estimates by 71.9%. Current expectations for its 2022 (ending January) revenue and earnings growth are pegged at 11.2% and 89.0%, respectively.

Growth is expected to normalize in the following year to 1.6% for revenue and 3.2% for earnings. The estimate revision trend is also encouraging: 2022 earnings estimate up 14.7% and 2023 earnings estimate up 8.7% in the last 30 days.

Genesco

The Nashville-based specialty retailer sells footwear, headwear and accessories in retail stores across the United States and Canada and online. Its popular brand names are Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection. It also sells footwear wholesale under its Johnston & Murphy brand and under the licensed Dockers brand.

This is another member of the Retail - Apparel and Shoes industry, which has returned 27.7% to investors year to date.

The Zacks Rank #1 company has a Value Score of B and Growth and Momentum Scores of A. Since beating the Zacks Consensus Estimate by 238.6% in its fiscal first quarter ending April, the company has seen slight upward revision in estimates. Current expectations call for revenue and earnings growth of 18.6% and 413.6% this year followed by 4.3% and 31.1% in the following year.

MarineMax

MarineMax is the nation's largest recreational boat and yacht retailer. Focused on premium brands, such as Sea Ray, Boston Whaler, Meridian, Hatteras, Azimut Yachts, Ocean Alexander, Galeon, Grady-White, Harris, Crest, Scout, Sailfish, Sea Pro, Scarab Jet Boats, Aquila and Nautique, MarineMax sells new and used recreational boats and related marine products and services, and provides yacht brokerage and charter services. MarineMax currently has 62 retail locations across 17 U.S. states and operates MarineMax Vacations in Tortola, British Virgin Islands.

A member of the Retail – Miscellaneous industry (top 19%), MarineMax has a Zacks Rank #1, Value and Growth Scores of A and Momentum Score of C. In the March quarter, it topped the Zacks Consensus Estimate for earnings by 131.5%, sending its 2021 (ending September) estimate up 26.9%. the 2022 estimate was also revised upward by 26.3%. The company is currently expected to grow revenue by 33.9% and 2.4%, respectively in 2021 and 2022. Its earnings are expected to jump 60.2% and 4.3% in the said years.  

Ulta Beauty

Bolingbrook, IL-based, Ulta is a leading beauty retailer of 25,000+ products including cosmetics, fragrance, skincare, hair care, bath and body products, and salon styling tools from about 500 well-established and emerging beauty brands across all categories and price points. Its private label products are Ulta Beauty Collection branded cosmetics, skincare and bath products.

At the end of Q1, it had 1,290 stores, expecting to add another 40 and remodel 19 this year. Each of these stores also have a full-service salon offering hair, skin and brow services. It also sells through its apps and website ulta.com. The company has a strong vendor base including the likes of Estee Lauder, L’Oréal and Shiseido. Its skincare category has been doing particularly well of late, with growing consciousness among consumers.

Zacks #1 ranked Ulta is also a member of the Retail – Miscellaneous industry. It has a Value Score of D but Growth and Momentum Scores of A. The company topped estimates by 113.5% in the first fiscal quarter ending April.

The Zacks Consensus Estimate for fiscal years 2022 and 2023 are up 31 cents (3.2%) and 16 cents (1.3%), respectively. Revenue and earnings for the current year are currently expected to grow 18.0% and 112.7%, respectively. For the next year, they’re expected to be up 17.2% and 21.9%, respectively.

Sally Beauty Holdings

Headquartered in Denton, TX, Sally Beauty is among the largest distributors of beauty products in the United States Puerto Rico, the U.K., Chile, Belgium, Canada, Mexico, Spain, Germany, France, Ireland, the Netherlands, and Peru. Through its 5,061+ stores, it sells a wide range of products including hair color and care products, styling tools, skin and nail care products and other beauty items at various price points.

Another member of the Retail – Miscellaneous industry, Sally Beauty has a Zacks Rank #1, Value Score A, Growth Score D and Momentum Score C. The company beat The Zacks Consensus Estimate for the March quarter by 307.1%. Since then, its fiscal 2021 (ending September) estimate is up 30%.

The estimate for 2022 is up 19.7%. Expected revenue and earnings growth for 2021 is a respective 7.4% and 81.2%. For 2022, growth is expected to be 2.4% and 4.9%, respectively.

Zacks Names “Single Best Pick to Double”

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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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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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Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
 
Foot Locker, Inc. (FL) : Free Stock Analysis Report
 
Sally Beauty Holdings, Inc. (SBH) : Free Stock Analysis Report
 
MarineMax, Inc. (HZO) : Free Stock Analysis Report
 
Genesco Inc. (GCO) : Free Stock Analysis Report
 
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