3 Top Stocks To Buy Before The End Of 2020

Similar to most other retail companies, Lululemon was impacted by the COVID-19 pandemic. As its retail stores were shut, the company managed to offset a great part of this decline via online sales. In Q3, e-commerce sales surged by a significant 155% year-over-year for Lululemon.

The e-commerce segment is far more profitable as well with an operating margin of 42%, compared with the 27% figure for retail stores. In Q2, while the DTC (direct-to-consumer) profits were $237 million, physical stores reported a loss of $5.3 million.

However, retail stores remain a key driver of top-line growth for Lululemon and investors can expect the stock to surge higher once COVID-19 related restrictions are relaxed.

During its last earnings call, the company said it has opened 492 out of its 506 locations all around the world. But has the recent rise in coronavirus infections in North America and Europe resulted in a significantly lower footfall and retail store traffic?

A Latin-America growth stock

The final company on the list is MercadoLibre (MELI - Get Rating), a stock that has more than doubled in 2020. In the third quarter, MercadoLibre reported net revenue of $1.1 billion, up 85% year-over-year. The company attributed its revenue growth to higher e-commerce sales. This stellar growth helped MELI to post a net income of $83.1 million, compared with a net loss of $81.9 million in the prior-year period.

In Q3, the company’s active users were up 92% at 76.1 million. It added 16.8 million unique users in the September quarter. Comparatively, its gross merchandise volume soared 62.1% to $5.9 billion while total payment volume was up 91% at $14.5 billion. This is another company that continues to benefit from the e-commerce revolution amid COVID-19.

MercadoLibre has multiple growth drivers and has an established presence in Latin America. The rise in purchasing power of Latin Americans and the penetration of online sales should make it one of the top-performing stocks right now.

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