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The U.S. retail sector is rebounding from operational disruptions it faced last year. Since the onset of the COVID-19 pandemic, e-commerce retail sales have been on the rise. Furthermore, in-store shopping has gained traction over the past few months.

U.S. retail sales increased 1.7% month-over-month in October, topping the 1.4% market forecast. This marks the sector’s strongest gains since March. In addition, the National Retail Federation (NRF) has predicted seasonal spending will break previous records, forecasting sales to grow between 8.5% – 10.5% versus 2020, during November and December.

Analysts are bullish on the holiday shopping, despite supply worries. Hence, we think retail stocks The Buckle, Inc. (BKE) and The Children’s Place, Inc. (PLCE), which beat their earnings estimates in their most recent quarter, could be solid additions to one’s portfolio.

The Buckle, Inc. (BKE)

Kearney, Neb.-based BKE is a casual apparel, footwear, and accessories retailer in the United States. Its offerings include a selection of casual branded apparel, including denim, tops, sportswear, accessories, footwear, and other services.

In September, BKE declared a $0.33 per share quarterly dividend, which was payable on Oct. 29. The move reflects upon the company’s ability to pay back shareholders and its stable cash position.

For its fiscal third quarter, ended Oct. 30, BKE’s sales, net of returns, and allowances increased 27.3% year-over-year to $319.43 million. Its net income improved from the prior-year quarter to $62.22 million. Its EPS rose from the same period last year to $1.26, topping the $0.92 consensus estimate by 37%.

A $4.55 consensus EPS estimate for the current year (fiscal 2022) indicates a year-over-year increase. Likewise, the $1.23 billion consensus revenue estimate for the current year reflects a 36% improvement from the prior year. Also, BKE has topped consensus EPS estimates in each of the trailing four quarters.

The stock has gained in price over the past year and has been recently trading at around $48.54. BKE’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

BKE has a Momentum and Quality grade of A. In the 63-stock, A-rated Fashion Fashion & Luxury industry, it is ranked #19. Click here to see the additional POWR Ratings for BKE (Growth, Value, Stability, and Sentiment).

The Children’s Place, Inc. (PLCE)

PLCE is a children’s specialty apparel retailer that operates through two broad segments–The Children’s Place U.S. and The Children’s Place International. The Secaucus, N.J.-based company’s offerings include apparel, footwear, accessories, and merchandise for children.

On Nov. 18, PLCE announced an additional $250 million repurchase of its outstanding stock. This move should increase shareholders’ value. On Nov. 9, the company launched its new tween fashion brand, Sugar & Jade, which provides fashion apparel, footwear, and accessories.

Regarding the  launch, Jane Elfers, President, and CEO said, “We have over four million customers to whom we are immediately marketing this exciting new brand, and we will deploy an “always on” strategy that drives customer acquisition, while also migrating the current The Children’s Place customer to Sugar & Jade at the appropriate moment in their purchase journey.”

PLCE’s net sales increased year-over-year to $558.23 million in its third fiscal quarter, ended Oct. 30. Its adjusted net income rose from the same period last year to $80.81 million. And its adjusted EPS improved from the prior-year quarter to $5.43, which beat the $4.40 Street estimate by 23.4%.

Analysts expect PLCE’s EPS to improve year-over-year to $2.81 in the current quarter (ending January 2022). Similarly, the Street expects PLCE’s revenue to increase from the prior-year quarter to $531.18 million. In addition, PLCE has an impressive surprise earnings history; it has beaten consensus EPS estimates in each of the trailing four quarters.

PLCE’s stock has gained in price over the past year and has been recently trading at around $93.99. It is no surprise that PLCE has an overall B rating, which translates to Buy in our POWR Rating system. PLCE has an A grade for Momentum and a B grade for Growth, Value, and Quality. It is ranked #22 in the Fashion & Luxury industry.

To see the additional POWR Ratings for Stability and Sentiment for PLCE, click here.