Ecommerce Sales Surpass $1 Trillion: 4 Solid Stocks to Buy – November 22, 2022

The pandemic has forced millions of people to shop from home, leading to an e-commerce boom. Since then, e-commerce has become people’s preferred mode of shopping as they have understood the convenience and security of shopping online. This has seen e-commerce grow by leaps and bounds over the past two years.

E-commerce has played a major role in helping the retail sector survive during the pandemic and has since boosted sales in the face of the challenges of soaring commodity prices. Given this scenario, stocks with a strong online presence, like Dollar General Corporation (CEO free report), Sportsman’s Warehouse Holdings, Inc. (SPWH free report), PC Connection, Inc. (CNXN free report) and Arhaus, Inc. (ARS Free Report), should benefit in the short term.

E-commerce sales continue to soar

According to the Commerce Department, e-commerce sales in the United States surpassed the $1 trillion mark for the first time to reach $1.02 trillion in the past 12 months. This comes despite soaring commodity prices. Online sales are expected to grow in single digits this year for the first time since 2009.

For 2022, online sales growth is expected to reach 9% as inflationary pressure continues to hit the retail sector. Even then, the retail sector is doing quite well, with sales still on the rise. E-commerce has played a key role in this regard.

The third quarter was relatively better for the retail sector. According to the Census Bureau, total retail sales for the quarter were $1.792 billion, up 0.7% from the previous quarter. Online sales increased 3% month-over-month and 10.8% year-over-year to $265.9 billion. E-commerce accounted for 14.8% of overall retail sales in the third quarter.

Although online retail sales are expected to grow in the single digits this year, e-commerce expansion has been massive since the COVID-19 outbreak. E-commerce has been making its presence felt for some time now, but the pandemic has given it a massive boost as millions shop from home for fear of contracting the virus and try to maintain social distancing.

Although people started visiting physical stores as the economy reopened, e-commerce continued to dominate. In fact, e-commerce spending was previously expected to hit $1 trillion in 2024, but the target was met this very year, proving its immense potential.

Needless to say, the market has doubled in size in just three years. E-commerce spending is 25% higher than pre-pandemic levels. If the pandemic hadn’t hit and the market had grown at the rate of 14-15%, which had been happening for years, total sales would have been around $815 billion, down from around $200 billion. of dollars.

Our choices

Given this scenario, it would make sense to invest in these four stocks with a strong online presence. Each of the stocks carries a Zacks rank of No. 1 (Strong Buy) or 2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks here.

Dollar General Corporation is one of the largest discount retailers in the United States. DG trades goods at low prices, usually $10 or less. Dollar General offers a wider selection of merchandise, including consumable items, seasonal items, home products, and apparel.

Dollar General’s forecast earnings growth rate for the current year is 13.8%. DG shares have gained 7.7% over the past 30 days. Dollar General Home currently has a #2 Zacks rank.

Sportsman’s Warehouse Holdings, Inc. is an outdoor sporting goods retailer. Its stores offer camping products, fishing products, and hunting and shooting products. SPWH stores also offer clothing, footwear, optical, electronics and accessories.

Sportsman’s Warehouse’s projected earnings growth rate for next year is 25.2%. The Zacks consensus estimate for current-year earnings has improved 3.6% over the past 60 days. SPWH currently sports a #1 Zacks rank.

Vivint Smart Home, Inc. is a smart home company, primarily operating in North America. VVNT provides an integrated smart home system with in-home consultation, professional installation and support from its smart home professionals, as well as 24/7 customer service and monitoring.

Vivint Smart Home’s expected profit growth rate for the current year is 70.2%. Shares of VVNT have gained 23.6% over the past 30 days. VVNT currently has a No. 2 Zacks rank.

Arhaus, Inc. is a lifestyle brand and omnichannel retailer of high-end home furnishings. ARHS offers an assortment of heirloom quality products.

Arhaus’ expected profit growth rate for the current year is 21.7%. The Zacks consensus estimate for current-year earnings has improved 15.1% over the past 60 days. ARHS currently wears a #2 Zacks rank.