In this article, we will look at the 11 Best Retail Stocks to Buy Right Now.
Resilient Consumer Spending, Falling Consumer Sentiment
Although the stock market is undergoing volatility due to the effects of Trump’s tariffs, the March retail sales report brought a beacon of light by showing that consumer spending remained stronger than expected. The Commerce Department reported that while consumer sentiment continued falling, demand remained high.
The retail sales advanced estimate showed a 1.4% month-over-month growth, surpassing the Dow Jones estimate of 1.2% and significantly exceeding the 0.2% increase in February. CNBC reported on April 16 that, according to numbers adjusted for seasonality (but not prices), the year-over-year growth came up to 4.6%. The monthly rise was the highest since January 2023.
The numbers were also better than expected, excluding autos, as sales grew 0.5% compared to the forecast of 0.3%. Economists anticipated that auto sales would rise as consumers attempted to get ahead of the impending aggressive tariffs imposed by President Trump. Hobby, sports goods, and music stores also underwent a 2.4% growth, while hardware stores and building materials underwent a 3.3% rise. Similarly, food service and drinking places grew by 1.8%.
These trends thus show that consumer spending is demonstrating resilience amid the uncertainty brought about by tariffs and the concerns of a weakening economy. CNBC reported that Chris Rupkey, chief economist at Fwdbonds, said the following about the situation:
“Net, net, these are simply blow-out numbers on March retail sales where the rush is on like this is one gigantic clearance sale. Consumers are expecting sharply higher prices the next year and are clearing the store shelves and picking up bargains while they can.”
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What March’s Positive Retail Sales Report Could Mean
These positive retail sales numbers challenge various market sentiment readings that pointed toward looming fears that Trump’s tariffs would plunge the American economy into a recession and take prices sky-high. We discussed this situation in a recently published article on 11 Best Internet Retail Stocks to Buy According to Analysts. Here is an excerpt from the article:
Trade policies and tariffs have dominated the stock market since the beginning of April, resulting in volatility and uncertainty. However, CNBC reported on April 16 that retail sales rose 1.4% in March, surpassing expectations. CNBC reported earlier on April 15 that the March retail sales report had the potential to impact investor positioning and confidence. According to Dow Jones, economists and experts anticipated a 1.2% month-over-month growth.
CNBC reported that the primary catalyst for this growth is a pull-forward of consumer spending to get ahead of increased good prices brought about by tariffs. It also reported that Freedom Capital Markets chief global strategist Jay Woods opined that retail stocks could undergo a short-term bounce if the retail sales report were in line or better than expected. He said:
“Some of these names have gotten way too far ahead of themselves on the downside that bounces are natural. They’ve gotten beaten down and mean reversion could lead to a nice rally over the coming days.”
Callie Cox, chief market strategist of Ritholtz Wealth Management, expressed similar sentiments, saying a strong retail sales report could potentially lead to a rise in consumer discretionary stocks.
“Consumer Discretionary stocks have been hit so hard that they may be more susceptible to a relief rally on the back of a retail sales report that doesn’t show the economy is falling apart,” said Cox.
With the retail sales report exceeding expectations, these analyst opinions could potentially come true.
With these reassuring trends in view, let’s look at the 11 best retail stocks to buy right now.
A customer browsing a variety of residential furniture and accessories in a retail store.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 30 retail stocks and chose the top 11 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11 Best Retail Stocks to Buy Right Now
11. Burlington Stores, Inc. (NYSE:BURL)
Number of Hedge Fund Holders: 52
Burlington Stores, Inc. (NYSE:BURL) is an off-price retailer of branded apparel. It also sells accessories, footwear, and home merchandise for relatively lower prices. Its clothing section offers an elaborate array of fashion-focused, in-season merchandise, including women’s and men’s ready-to-wear, youth, baby, and coats. The company operates more than 1007 stores, primarily under the brand name Burlington Stores.
Burlington Stores, Inc. (NYSE:BURL) has a strong off-price business model. It saw total sales growth of 11% in fiscal year 2024, with comparable store sales growth of 4%. The company opened 101 net new stores in 2024 and relocated 31 of its older oversized locations. Investors are bullish on the stock due to its solid metrics, which reflect significant progress toward the company’s long-term financial goals. In a report released on April 14, Matthew Boss from J.P. Morgan maintained a Buy rating on Burlington Stores, Inc. (NYSE:BURL) and set a price target of $287.00.
The company also delivered strong performance in fiscal Q4 2024, with comparable store sales growth of 6% versus a guidance of 0% to 2%. This growth was attributed to deliberate strategies executed by the company’s merchants, supply chain, and store teams. Its net income for the quarter was $261 million, while diluted EPS was $4.02. Burlington Stores, Inc. (NYSE:BURL) ranks 11th on our list of the best retail stocks to buy right now.
10. Dollar General (NYSE:DG)
Number of Hedge Fund Holders: 53
Dollar General (NYSE:DG) is a retailer that offers an elaborate array of merchandise in its stores, including consumables, beverages, seasonal items, and more. Its merchandise collection includes its own private brands and brands from manufacturers. The company is the tenth-best retail stock to buy right now.
On April 8, Truist raised the firm’s price target on Dollar General (NYSE:DG) to $93 from $76. Robert Ohmes from Bank of America Securities also reiterated a Buy rating on Dollar General (NYSE:DG) in a report released on March 14, setting a $90.00 price target. The analyst gave his rating due to the company’s positive outlook amid elevated expenses in 2025. The company exhibited resilience by exceeding earnings expectations in fiscal Q4 2024. Adjusted EPS reached $1.68, surpassing the anticipated $1.50. This was attributed to a 1.2% increase in comparable sales, supported by ticket growth.
The analyst also said that Dollar General (NYSE:DG) is on the path to attaining a 6%-7% operating margin by 2028-2029, up from the current forecast of approximately 4.6% for 2025. This bullish outlook is supported by strategic initiatives such as DG Media, an increase in damages management, and a bounce back to pre-pandemic shrink levels. In addition, Dollar General’s (NYSE:DG) digital expansion and ‘Back to Basics’ initiatives are also factors behind the analyst’s bullish sentiments, as they are expected to improve operational efficiency and productivity, supporting long-term growth and market share gains.
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