3 Retail Stocks That Surged Last Week After Beating Earnings Estimates

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Investors’ concerns over the pace of economic recovery due to the resurgence of COVID-19 cases have fostered market volatility. In addition, this month consumer sentiment fell to a pandemic-era low. However, due to solid second-quarter corporate earnings results, the major stock market indexes are hovering near their all-time highs. According to a FactSet research report, more S&P 500 companies than average beat EPS estimates in the second quarter. In addition, several retail companies have strengthened their digital presence, positioning them well to gain in the coming months.

Furthermore, many retailers deal with inflation by passing on higher costs to their customers through price hikes. The consumer price index increased 5.4% in July, and the International Monetary Fund (IMF) warned that inflation could be persistent. So, while investors are worried about rising inflation,  retailers that are passing on higher costs to customers are not expected to be impacted substantially.

So, we think it could be wise to bet on retail stocks Lowe’s Companies, Inc. (LOW), BJ’s Wholesale Club Holdings, Inc. (BJ), and Macy’s, Inc. (M), which have advanced significantly in price since reporting their impressive second-quarter earnings results. They are also favorably positioned to continue soaring in the coming quarters.

Lowe’s Companies, Inc. (LOW)

LOW operates as a home improvement retailer internationally. The Mooresville, N.C. company offers a wide range of construction, maintenance, repair, remodeling, and decorating products. It operates more than 1,974 home improvement and hardware stores and sells its products through its website and mobile application.

The company acquired the STAINMASTER brand in April 2021. It is the most recognized and trusted carpet brand on the market. The acquisition is expected to advance LOW’s Total Home strategy and also expand its product portfolio.

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