Despite the initial disruptions caused by the COVID-19 pandemic, retail companies witnessed significant growth over the past two years. Moreover, with the worst of the COVID-19 pandemic behind us, consumers are now resuming in-store shopping.
Moreover, the retail market is poised to grow due to rising discretionary spending with the economic recovery. In February, retail sales increased 0.3% amid the rising inflation and growing tensions between Ukraine and Russia. In 2022, worldwide retail sales are poised to grow 5% year-over-year to exceed $27.33 trillion.
Therefore, it could be wise to invest in fundamentally sound retail stocks, ODP Corporation (ODP) and Live Ventures Incorporated (LIVE), which are both up more than 18% year-t0-date and still have more room to run.
Click here to checkout our Retail Industry Report for 2022
ODP Corp. (ODP)
ODP is engaged in providing business services and supplies, products, and digital workplace technology solutions for small, medium, and enterprise businesses. The company has two operational segments: Business Solutions, which provides supply products and services, cleaning and breakroom supplies, technology services, and other services; whereas the Retail division operates a chain of retail stores.
Recently, Office Depot, a wholly-owned subsidiary of ODP and Instacart, the leading online grocery platform in North America, announced that they would provide same-day delivery from more than 1,000 Office Depot and OfficeMax stores across the U.S. as Instacart continues to widen the selection of household goods on its marketplace. Through Instacart, more than 70 million U.S. households can shop from a broad selection of office and school supplies from Office Depot.
During the fourth quarter ending December 25, 2021, ODP's sales amounted to $2.04 billion. The gross profit amounted to $432.00 million, while its operating income increased 55% year-over-year to $31.00 million over the period. The cash and cash equivalent stood at $514.00 million for the fiscal year ending December 25, 2021.
Analysts expect its revenue to increase 0.1% year-over-year to $8.37 billion for the fiscal year ending December 2023. The company's EPS is expected to grow 16.2% year-over-year to $0.59 in the second quarter ending June 2022. In addition, the company has an impressive earnings surprise history, as it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock has gained 25.1% over the past year and 18.2% over the past three months.
ODP's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
ODP is also rated a B grade for Growth, Value, and Quality. Within the Specialty Retailers industry, it is ranked #1 of 47 stocks.
To see additional POWR Ratings for Sentiment, Stability, and Momentum for ODP, click here.
Live Ventures Incorporated (LIVE)
LIVE, along with its subsidiaries, operates through, Flooring segments which manufacture and sells carpets and rugs and yarn products focusing on the residential, niche commercial, and hospitality end-markets; Steel manufacturing segment, which manufactures and sells pre-finished decarb free tool and die steel products; and Retail Business segment operates 63 specialty entertainment retail storefronts in the United States.
LIVE's revenue increased 20.3% year-over-year to $75.16 million. The operating income increased 42.7% from its year-ago value to $10.41 million, while its net income grew 24% from its prior-year quarter to $6.55 million. The company's EPS rose 25.2% year-over-year to $2.04. The company's shares soared 58.2% over the past year and 36.3% over the past month.
LIVE's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value and a B for Sentiment. In the same industry, it is ranked #10.
In total, we rate LIVE on eight different levels. Beyond what we've stated above, we have also given LIVE grades for Momentum, Stability, Quality, and Growth. Get all the LIVE ratings here.
ODP shares were unchanged in after-hours trading Monday. Year-to-date, ODP has gained 18.53%, versus a -3.71% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
2 Surging Specialty Retail Stocks, With More Room to Run StockNews.com
