Compared to the overall market, the retail sector has been underperforming recently. While the S&P 500 as a whole is up by 26.78% since the beginning of the year, retail companies in the S&P 500 only achieved a relatively small 2.09% year-to-date return. Investors are still skeptical about investing in retail at this moment as they believe people will cut down on their discretionary spending ahead of the economic slowdown.
While a lot of the companies in the retails struggled with the macroeconomic headwinds, some were able to sail through this challenging time for the sector. One commonality with retails that had success recently was dominance in their own niche market and market cap, giving them a major competitiveness over its growing rivals. While all in different maturity phases, these stocks still have potential to go up more. Below are three millionaire-maker retail stocks that will bring fortune to investors.
Coupang (CPNG)
Coupang (NYSE:CPNG) is an e-commerce stock that originated in South Korea. It was the pioneer of the Korean online market 14 years ago, and just less than two years ago, it relocated its headquarters from Seoul, South Korea to Seattle, United States. Known as the Amazon of South Korea, Coupang achieved rapid growth especially during the pandemic, and now the company is the largest online retailer in Korea.
The company’s largest strength is its strategic positions. 70% of Koreans live within seven miles of Coupang’s warehouse, and because of this, the retailer is able to deliver items to customers quickly and conveniently.
While there are lots of positives with Coupang, one of them is certainly its financials. Most impressively, the Korean online retailer achieved net revenues just over $7 billion in the first quarter of 2024, which was an astonishing 28% increase from the same period a year ago. Furthermore, its gross profit and gross margin went up by 36% and 27.1% respectively.
The success story of Korea’s biggest online retailer will continue, and investors should buy before they miss out on this opportunity.
TJX Companies (TJX)
TJX Companies (NYSE:TJX) is an American discount department store that is the owner of many famous subsidiaries such as Marshalls, T.J. Maxx, HomeGoods and more. While the majority of retail stores struggled with a period marked by high inflation and now high interest rates, TJX Companies’ strategic business model helped the retailer navigate through its challenges smoothly and outperform its competitors.
TJX Companies adapted very well to the difficult macroeconomic conditions and consumer preferences. When inflationary pressure was high, discount stores like T.J. Maxx and Marshalls attracted consumers who did not have extra money to spend on the discretionaries.
While it offers clothing that are marked anywhere from 20-60% below the full retailer price, its reputation to the public is positive. Most people recognize TJ Companies’ discount stores as places that sell good branded clothing at a reasonable price. TJX Companies pioneered and dominated this niche discount market, which will continue to equip the company with a strong advantage and competitiveness in the long run.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is the largest online retailer and the second largest retailer globally after Walmart (NYSE:WMT). Just two weeks ago, the largest online retailer in the world joined the $2 trillion club, making it the fifth ever company to accomplish this milestone.
While Amazon has most likely hit its peak growth already, there are still plenty of reasons for investors to be bullish about Amazon’s stock.
As of writing, we are less than a week away from Prime Day, an annual event where Amazon provides a multitude of discounts to its members across different products. Last year, Amazon’s two days of Prime Day sales accounted for 2% of its annual revenue. According to analysts, this year’s Prime Day might be the largest one in the company’s history.
Moreover, Amazon has strong financials that seem attractive to investors. In the first quarter of 2024, the retail giant had a breathtaking 228.85% growth in net income as well as a 12.53% revenue growth year over year. With such strong financials and continued dominance, Amazon will maintain its position as one of the millionaire-maker retail stocks for a long time.
On the date of publication, Andy Kim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
