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The Zacks Analyst Blog Highlights: L Brands, Abercrombie & Fitch, AutoNation, MarineMax and Buckle

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Zacks Equity Research
·8-min read
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For Immediate Release

Chicago, IL – April 20, 2021 – 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: L Brands, Inc. LB, Abercrombie & Fitch Co. ANF, AutoNation, Inc. AN, MarineMax, Inc. HZO and The Buckle, Inc. BKE.

Here are highlights from Monday’s Analyst Blog:

Spike in March Sales Makes These 5 Retail Stocks Must-Buys

The Commerce Department highlighted that U.S. retail and food services sales in March rose 9.8% sequentially to $619.1 billion, following a revised reading of 2.7% decline in February. Markedly, this was the best monthly gain in retail sales since May last year, when the initial lockdown measures were lifted.

Evidently, mass inoculation drive and the passing of a coronavirus relief package worth $1.9 trillion that entitles eligible Americans to $1,400 stimulus checks triggered spending across the board. Well, demand was not restricted to a few categories as was noticed when the coronavirus crisis gripped the economy.

As business activities resume and coronavirus-induced restrictions ease, consumers filled their shopping carts. Americans flocked to restaurants and bars, bought apparels, spent on gasoline, and purchased sports equipment, furniture and electronics and appliance. Sales at auto dealers were also stellar.

Reopening of the economy and gradual return to active social lifestyle, events and occasions are likely to have spurred demand. We note that U.S. retail sales surged 27.7% from March last year. Sales at Internet retailers rose roughly 28.7% on a year-over-year basis as more people opted for e-route over physical retailing amid the pandemic.

Evidently, retailers look well-poised to tap any rise in demand. In this respect, companies have been focusing on product strategy to resonate well with customers and advancing omni-channel capabilities. They have been directing resources toward digital platforms in order to better engage with customers, accelerating fleet optimization initiative and augmenting supply chain.

That said, here we have highlighted five stocks from Retail-Wholesale sector that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a VGM Score of A or B. You can see the complete list of today's Zacks #1 Rank stocks here.

5 Prominent Picks

L Brands' sustained focus on cost containment, inventory management, merchandise and speed-to-market initiatives makes it a potential pick. Notably, the company continues to revamp its business by improving store experience, localizing assortments and enhancing its direct business. The company recently raised earnings view for first-quarter fiscal 2021 courtesy of improved sales trends.

Incidentally, it now envisions earnings between 85 cents and $1.00 per share for the first quarter, up from the earlier-guided band of 55-65 cents. The stock has a Zacks Rank #1 and a VGM Score of A.

This specialty retailer of women's intimate and other apparel, beauty, and personal care products has a trailing four-quarter earnings surprise of 479.7%, on average. It has a long-term earnings growth rate of 13%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings indicates an improvement of 15.9% and 41.3%, respectively, from the year-ago period.

You may invest in Abercrombie & Fitch. The company has been trending up the charts, given its investments in omni-channel capabilities as well as marketing, data and analytics, and prudent inventory management strategies. Moreover, it has been benefiting from an increased focus on EMEA and APAC regions.

Additionally, the company is gaining from strong digital sales, up 34% year over year in fourth-quarter fiscal 2020. This along with store-optimization plans is likely to act as a catalyst in the near term. The stock has a Zacks Rank #1 and a VGM Score of A.

This specialty retailer has a trailing four-quarter earnings surprise of 404.9%, on average. It has a long-term earnings growth rate of 18%. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 11.4% and 290.4%, respectively, from the year-ago period.

We also suggest betting on AutoNation, which operates as an automotive retailer in the United States. The company's diversified product mix, large dealer network and store expansion efforts bode well. Markedly, the company has been making investments to enhance its digital capabilities. It significantly upgraded its AutoNation Express integrated retailing solution.

Impressively, this Fort Lauderdale, FL-based company has a trailing four-quarter earnings surprise of 97.3%, on average. The stock has a Zacks Rank #2 and a VGM Score of A.

Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 8.9% and 5.1%, respectively, from the year-ago period. It has a long-term earnings growth rate of 11.2%.

Investors can also count on MarineMax. The company's strategic investments in high-margin businesses such as finance, insurance, brokerage, marina and service operations bode well. Markedly, the acquisitions of Northrop & Johnson in July 2020 and Fraser Yachts in 2019 strengthened its position in the superyacht category.

In October last year, the company announced the acquisition of SkipperBud's and its affiliate, Silver Seas Yachts. The buyout has meaningfully enhanced MarineMax's presence in the Great Lakes region and the West Coast of the United States.

Impressively, this recreational boat and yacht retailer has a trailing four-quarter earnings surprise of 99.9%, on average. The stock has a Zacks Rank #2 and a VGM Score of A. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests growth of 25.7% and 27.5%, respectively, from the year-ago period.

Buckle is worth betting on. The company has managed to deliver monthly sales increases despite a tough retail landscape. Markedly, net sales for the five-week period ended Apr 3, 2021 soared 240.2% to $139.4 million from the year-ago period, when sales were hit by pandemic-induced store closures. It has been witnessing strength in the online business amid the pandemic. Markedly, online sales surged 81.5% in fourth-quarter fiscal 2020.

Additionally, momentum in the youth business owing to evolution of the Mini Me assortment appears encouraging. Also, the company's women's and men's merchandise categories have been performing well. This apparel, footwear and accessories retailer had witnessed a positive earnings surprise in the last reported quarter.

The stock currently has a Zacks Rank #2 and a VGM Score of A. Moreover, the Zacks Consensus Estimate for its current financial year sales and earnings suggests improvement of 8.3% and 3.4%, respectively, from the year-ago period.

Zacks Top 10 Stocks for 2021

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Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don't miss your chance to get in on these long-term buys.

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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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AutoNation, Inc. (AN) : Free Stock Analysis Report
 
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
 
MarineMax, Inc. (HZO) : Free Stock Analysis Report
 
Buckle, Inc. The (BKE) : Free Stock Analysis Report
 
L Brands, Inc. (LB) : Free Stock Analysis Report
 
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