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The Zacks Analyst Blog Highlights: RH, Tilly's, Movado Group, Boot Barn Holdings and Casey's General Stores

Zacks Equity Research
Frontline (FRO) is seeing favorable earnings estimate revision activity and has a positive Zacks Earnings ESP heading into earnings season.

For Immediate Release

Chicago, IL – October 29, 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 RH RH, Tilly's, Inc. TLYS, Movado Group, Inc. MOV, Boot Barn Holdings, Inc. BOOT and Casey's General Stores, Inc. CASY.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday’s Analyst Blog:

Holiday Hiring to Hit 4-Year High: 5 Retail Stocks to Buy

Holiday hiring in the United States would be the highest since 2014, per a recent report from leading global outplacement firm Challenger, Gray & Christmas Inc. The holiday season is considered one of the best times of the years by retailers. This has seen retailers go on a hiring spree ahead of holiday sales that should give sales a boost.

Understandably, with the economy flourishing and consumer confidence touching a two-decade high, an increasing number of Americans are willing to spend more during the holiday season. Per the National Retail Federation (NRF) retail sales during the holiday season are expected to reach around $721 billion. This certainly is a good sign for retailers. Given this scenario, investing in retail stocks looks like a profitable option.  

Holiday Hiring to Touch 4-Year High

Per the report, retailers in the United States would be hiring 704,000 workers ahead of holiday season. This reflects an increase of 1.2% from the previous best figures in 2014. A large number of retailers such as Target Corporation, Macy’s, Inc. and Amazon.com, Inc. are aggressively hiring ahead of the holiday season between Thanksgiving and Christmas.

The holiday season is typically viewed as one of the best times for retailers. Amazon expects to hire 100,000 workers, while Target has plans of adding seasonal hires by 20% to 120,000. Macy’s too is planning to employ 80,000 workers ahead of the holiday season.

That said, it is increasingly becoming difficult to find retail workers, with the unemployment level hitting record lows. This has also seen retailers like Amazon announcing a rise in minimum wages for its U.S. employees to $15 per hour. The hiring spree hints at the high confidence level of retailers, which are expecting higher sales this holiday season.

Holiday Retail Sales to Grow

Per the National Retail Federation, holiday sales will grow 4.3% to 4.8%, aided by a flourishing economy and high consumer confidence. Per the NRF, retail sales for November and December are projected to grow between $717.45 billion and $720.89 billion, excluding autos, gasoline and restaurant sales. In 2017, retail sales during the holiday season came in at $687.87 billion.

Moreover, the last two months, per NRF, could account for 20-40% of annual sales for many retailers. Also, on Oct 25, Moody’s Investor Service for the first time since July 2015 raised its outlook from stable to positive for the U.S. retail industry. Moody’s also said that it expects the retail sector to benefit the most from investing in e-commerce and operating efficiencies.

On Thursday, shares of major retailers rallied. Shares of Macy’s and Target gained 2.3% and 1.9% respectively. Shares of Kohl’s Corporation increased 2.4%, while Nordstrom, Inc. jumped 3.7%.

Our Choices

Understandably, an increasing number of retailers are aggressively hiring workers ahead of the holiday season. With the economy flourishing and consumer confidence at a two-decade high, retail sales are likely to get a boost this holiday season. This is why, picking retail stocks looks like a smart option now. However, picking winning stocks may be difficult.

This is where our VGM Score comes in. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Such a score allows you to eliminate the negative aspects of stocks and select winners. However, it is important to keep in mind that each Style Score will carry a different weight while arriving at a VGM Score.

We have narrowed down our search to the following stocks, each of which has a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a good VGM Score. You can see the complete list of today’s Zacks #1 Rank stocks here.

RH is a luxury brand in the home furnishings marketplace, offering product assortments across a number of categories.

RH has a Zacks Rank #1 and VGM Score of A. The company’s projected growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current year has improved 14.7% in the last 60 days.

Tilly's, Inc. is a specialty retailer in the action sports industry selling clothing, shoes and accessories.

Tilly's has a Zacks Rank #1 and VGM Score of A. The company’s projected growth rate for the current year is 38.5%. The Zacks Consensus Estimate for the current year has improved 11.1% in the last 60 days.

Movado Group, Inc. is one of the world's premier watchmakers. Movado Group designs, manufactures and distributes watches from 10 of the most recognized and respected names in time.

Movado has a Zacks Rank #1 and VGM Score of B. The company’s projected growth rate for the current year is 27%. The Zacks Consensus Estimate for the current year has improved 5.4% in the last 60 days.

Boot Barn Holdings, Inc. operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. 

Boot Barn Holdings sports a Zacks Rank #1 and has a VGM Score of B. The company’s projected growth rate for the current year is 65.7%. The Zacks Consensus Estimate for the current year has improved 0.8% in the last 60 days.

Casey's General Stores, Inc. and its wholly owned subsidiaries operate convenience stores under the names Casey's and Casey's General Store. 

Casey's General Stores has a Zacks Rank #2 and VGM Score of B. The company’s projected growth rate for the current year is 22.1%. The Zacks Consensus Estimate for the current year has improved 2% in the last 60 days.

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Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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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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Tilly's, Inc. (TLYS) : Free Stock Analysis Report
 
Caseys General Stores, Inc. (CASY) : Free Stock Analysis Report
 
Restoration Hardware Holdings Inc. (RH) : Free Stock Analysis Report
 
Movado Group Inc. (MOV) : Free Stock Analysis Report
 
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
 
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