3 cheap department store stocks to buy in April

The Russian-Ukrainian war has worsened global supply chain disruptions, contributing to soaring inflation. However, sustained demand for consumer goods should help the performance of department store operators. Therefore, we think fundamentally sound department store stocks Kohl’s (KSS), Nordstrom (JWN) and Macy’s (M), which are trading at deep discounts to their peers, could be solid bets now. Continue reading.


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The Russian-Ukrainian war had a negative impact on global supply chains. With several Western sanctions imposed on Russia that hamper international trade, inflation has skyrocketed. According to the Ministry of Labor, the consumer price index jumps 8.5% per year in March, hitting a new 40-year high, despite an increase in federal interest rates last week. However, consumer demand should remain stable and retail sales should register a decreased but increased than the pre-pandemic growth rate.

Sustained demand for consumer goods should help department store operators perform. Global department store sales expected to increase at a CAGR of 4% from 2020 to 2030.

Against this backdrop, we think it might make sense to bet on cheap but fundamentally strong department store stocks Kohl’s Corporation (KSS), Nordstrom, Inc. (JWN) and Macy’s, Inc. (M).

Click here to view our 2022 Retail Industry Report

Kohls Corporation (KSS)

KSS in Menomonee Falls, Wisconsin, is a leading omnichannel retailer that operates as a retail business in the United States. It offers brand name apparel, footwear, accessories, beauty and home products; and operates approximately 1,100 stores and its online website.

On March 1, 2022, KSS CEO Michelle Gass said, “We continue to see a lot of value in our business. We are reinforcing our commitment to creating shareholder value by doubling our dividend and planning to repurchase at least $1.0 billion of shares in 2022.”

KSS’s total revenue for its fiscal fourth quarter, ended January 29, 2022, was $6.50 billion, up 5.8% year-over-year. Its net sales were $6.22 billion, up 5.8% year-over-year. In addition, the company’s long-term commitment debt was $1.91 billion for the period ended January 29, 2022, compared to $2.45 billion for the period ended January 30, 2021.

KSS’s forward non-GAAP P/E of 8.32x is 31.9% below the industry average of 12.22x.

Analysts expect KSS revenue to grow 2.6% year-over-year to $18.95 billion in 2023. Its EPS is expected to rise 8.6% to 7, $85 in 2024. Additionally, it has exceeded consensus EPS estimates in each of the last four quarters. . Over the past six months, the stock price has gained 34.3% to close yesterday’s session at $60.30.

KSS’s strong fundamentals are reflected in its POWR Rankings. The stock has an overall rating of B, indicating a buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.

KSS has an A rating for value and quality and a B rating for growth. In category A Fashion & Luxury industry, it is ranked No. 17 out of 66 stocks. Click on here to see additional POWR ratings for Momentum, Sentiment, and Stability for KSS.

Nordstrom, Inc. (JWN)

fashion retailer JWN in Seattle, Washington, provides a variety of attractive clothing, footwear, accessories and homewares for men, women and children. He offersrs a range of private label brands and products. The company operates 94 Nordstrom stores and 240 Nordstrom Rack stores in the United States, two outlet stores and seven local Nordstrom service centers.

On March 1, 2022, Pete Nordstrom, President and Chief Brand Officer of JWN said, “Looking forward, we are focused on more effectively balancing inventory with demand while increasing efficiency across our network and by offering novelty and selection to our customers.

JWN’s total revenue was $4.49 billion for the fourth quarter ended January 29, 2022, up 23.1% year-over-year. Its net sales were $4.38 billion, up 23.4% year-over-year. And its net income rose 506.1% year-over-year to $200 million, while its EPS rose 485.7% to $1.23.

JWN’s forward non-GAAP P/E of 8.84x is 27.6% below the industry average of 12.22x.

JWN’s revenue is expected to increase 5.1% to $15.54 billion in its fiscal 2023. Its EPS is expected to increase 108.7% to $3.13 in 2023. Over the past month, the stock price gained 23.4% to close yesterday’s session at $28.38.

JWN has an overall rating of B, which is equivalent to Buy in our POWR rating system. It has an A rating for value and a B rating for growth and quality. It is ranked #27 in the Fashion & Luxury industry. Click on here to check additional JWN ratings for Momentum, Stability, and Sentiment.

Macy’s, Inc. (M)

An omnichannel retail company, M operates stores, websites and mobile applications. the Based in Cincinnati, Ohio the company sells a range of merchandise including apparel and accessories for men, women and children; beauty products; household furniture; and other consumer goods; and operates approximately 725 department stores.

On March 15, 2022, M announced the launch of their brand platform – Own Your Style. Rich Lennox, M Brand Director, said: “This brand transformation will enhance our customers’ shopping experience with more personal touchpoints and provide them with real value and style they can own. “

For the fourth quarter, ended January 29, 2022, M net sales increased 27.8% year-on-year to $8.66 billion. Its net income was $742 million, up 363.8% year-on-year, while its EPS was $2.44, up 388% from one year to the next.

M’s non-GAAP P/E of 5.67x is 53.6% below the industry average of 12.22x.

M’s EPS is expected to rise 105.1% to $0.8 for the three months ended April 30, 2022. It has exceeded Street’s EPS estimates in each of the past four quarters. Over the past nine months, the stock has gained 29.5% to close yesterday’s session at $24.74.

It’s no surprise that M has an overall rating of B, which equates to a buy in our proprietary rating system. Additionally, it has an A rating for value and quality and a B rating for growth.

M is ranked #13 in the Fashion & Luxury industry. Click on here to see additional POWR ratings for M (Momentum, Stability and Sentiment).

Click here to view our 2022 Retail Industry Report


Shares of KSS rose $0.63 (+1.04%) in premarket trading on Wednesday. Year-to-date, the KSS has gained 24.52%, compared to a -7.41% rise in the benchmark S&P 500 over the same period.


About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions with her insightful commentary.

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