3 Consumer Discretionary Stocks to Buy as Holiday Sales Soar

With evolving customer behavior, robust economic growth, and rising personal expenditure, the consumer discretionary industry is on a solid uptrend, ready to capitalize on the upcoming holiday season. The stage is set for a shopping bonanza as consumer spending is projected to reach a record high this year. Let’s delve into three standout stocks to consider: Lowe’s Companies, Inc. (LOW), The TJX Companies, Inc. (TJX), and Target Corporation (TGT).

Holiday Sales Surge

As per the latest consumer survey from the National Retail Federation (NRF), consumers are gearing up to spend an average of $902 per person this holiday season, a notable increase from last year. This surge in holiday spending presents a ripe opportunity for savvy investors to dive into the consumer discretionary sector.

NRF’s vice president, Katherine Cullen, emphasizes the festive spirit, stating, “The winter holidays are a treasured time for Americans, and they are prioritizing spending on family this holiday season.” A favorable environment for personal borrowing—thanks to recent Federal Reserve rate cuts—means that consumers have more disposable income to splurge on luxuries, gifts, and décor.

Lowe’s Companies, Inc. (LOW)

Lowe’s is positioning itself strongly in the home improvement sector, appealing to customers with an innovative in-store experience powered by Apple’s Vision Pro technology. This cutting-edge approach allows customers to visualize their dream kitchens in a 3D environment.

In its latest quarterly report (ending August 2, 2024), LOW showcased substantial growth with net sales of $23.59 billion. The company’s operating income hit $3.45 billion, reflecting the increasing demand for home improvement products. Notably, LOW reported net earnings of $2.38 billion, and its year-over-year EPS climbed impressively, showcasing its strong market position. Over the past year, LOW’s shares have climbed 37.4%, closing at $261.83.

Lowe’s holds a solid POWR Rating of B, indicating a Buy, and ranks #14 in the Home Improvement & Goods industry. Its stellar performance is backed by the company’s commitment to innovation and exceptional customer service. For further insights on LOW’s performance across various metrics, check it out here.

The TJX Companies, Inc. (TJX)

TJX stands out as a leading off-price apparel and home fashion retailer. Its recent strategic move to enter a joint venture with Grupo Axo S.A.P.I. de C.V. marks a significant expansion into the rapidly growing Mexican market. With annual net sales increasing by 5.6% to $13.47 billion in its latest quarter (ending August 3, 2024), TJX’s positive trajectory is hard to ignore.

The company’s net income rose to $1.10 billion, reflecting a robust 11.1% growth. Analysts forecast that TJX’s EPS for Q3 (ended October 2024) will see a 6.6% increase year-over-year, emphasizing their impressive operational resilience. With shares up 28.3% over the past year, closing at $113.03, TJX is rated a B for overall market performance. Find out more about TJX’s detailed ratings here.

Target Corporation (TGT)

Target operates a diverse range of merchandise, allowing it to cater to a broad audience. The company announced a quarterly dividend of $1.12 per common share, reflecting its commitment to returning value to shareholders. TGT boasts a healthy yield of 2.99%, with its dividend payouts growing at a significant rate of 14.6% over three years.

During the recent quarter ending August 3, 2024, Target’s revenue increased by 2.7% to $25.45 billion. The operating income surged 36.6%, indicating strong operational performance. With shares soaring 38.6% over the past year to close at $151.77, TGT holds a POWR Rating of B, ranking #10 in the Grocery/Big Box Retailers industry. For a comprehensive breakdown of TGT’s performance and ratings, explore the details here.

Take Action Now!

The consumer discretionary sector is primed for expansion, especially with the surge in consumer spending anticipated this holiday season. Adding Lowe’s, TJX, and Target to your portfolio could position you strongly to capture the benefits of these market trends. With a combination of solid fundamentals, innovative approaches, and growing operational metrics, these stocks are poised for significant upward movement.

For those serious about financial gains, stay informed and keep your finger on the pulse of these evolving market dynamics. Don’t miss your chance to take advantage of these trends!