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Growth in Retail Earnings: GNC Holdings Inc (GNC), Select Comfort Corp. (SCSS), Abercrombie & Fitch Co. (ANF)

The latest jobless claims figures suggest continued improvement in the labor market. And that’s good for consumer stocks. Here are three fast-growing, consumer-oriented stocks that caught my attention and deserve a closer look.

Hedge Funds Are Buying These 6 Stocks with EPS Price Mismatches

Vitamins and other supplements

With more people working, more people will have more money to spend on healthcare products. I’m not talking about just the basic vitamins and mineral supplements, but the other diet and fitness products.

Specialty retailer GNC Holdings Inc (NYSE:GNC) caught my attention when I noticed that analysts are looking for about 18% growth in EPS next year. That places it among the anticipated top performers in the industry. The retailer of vitamins and herbal supplements, as well as other diet and sports nutrition products, has been on a tear lately. Its revenue in the trailing 12-month (TTM) period climbed 17.3%, much faster than the industry average of 6.5%, thanks to improvement across all of its business lines, especially retail and franchise revenue, which advanced 17.6% and 21.9%, respectively.

Over the last month, GNC Holdings Inc (NYSE:GNC) shares have gained about 12%, versus an industry average of about 2%. Such a gain is not necessarily surprising when one considers that the company also announced an increase in its dividend and a share-repurchase program. Management expects to open 150 new retail locations and is planning on 30 new domestic franchises. Even more impressive, though, is the planned international growth. Management expects 175-200 new international franchises this year.

This does not mean that all the good news is fully priced into the shares. One could reasonably argue that the anticipated earnings growth would command a premium valuation. Yet, GNC Holdings Inc (NYSE:GNC) shares carry a P/E ratio of 17.6, which is still below the industry average of 20. Moreover, it has a PEG, or forward P/E to growth, ratio of 0.7, which is low enough to appeal to more conservative value investors.

Good night’s rest

Another area that stands to benefit from more people on payrolls is some type of home improvement. While that might mean considerable renovations for some, for others it could mean new furniture, such as a bed.

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