It’s that time of the year once more. No, I‘m not talking about summer at the lake, ocean, or wherever you choose to kick back and relax. I’m talking about Amazon Prime Day, the two days of the year when Amazon (NASDAQ:AMZN) makes a really obscene amount of money instead of its usual massive haul.
This year’s two-day event starts at midnight on Monday, June 21, and finishes at midnight on Tuesday, June 22. Last year’s event was held on Oct. 13 and Oct. 14. It generated $10.4 billion in sales globally. That was up from $7.2 billion in 2019.
I’m not here to talk about the deals, although there are plenty of those. I’m here to talk about seven retail stocks that could receive a Prime Day boost.
Naturally, the first company that comes to mind is Amazon itself.
According to DigitalCommerce360.com, Amazon’s first Prime Day event in 2015 was split fairly evenly between its third-party sales (48%) and Amazon’s own sales (52%). However, by 2020, that balance disappeared, with third-party sellers getting 35% while Amazon generated 65%.
Which dollar of sales do you think is more profitable? You can figure that out for yourself.
Anyway, without further ado, here are my seven retail stocks to benefit from Amazon Prime Day.
- Apple (NASDAQ:AAPL)
- Walmart (NYSE:WMT)
- Target (NYSE:TGT)
- Kohl’s (NYSE:KSS)
- Best Buy (NYSE:BBY)
- Bed Bath & Beyond (NASDAQ:BBBY)
- Wayfair (NYSE:W)
Happy shopping and … investing!
Retail Stocks to Buy for Amazon Prime Day: Apple (AAPL)
When you think of Prime Day, I’m sure Apple isn’t the retailer that first comes to mind. It’s probably not even second or third.
However, I happened to see DigitalTrends’ Prime Day Deals from June 15. Apparently, Amazon is selling the second-generation Apple AirPods for almost 25% off and the AirPods Pro version for 21% off.
I know, it’s not Apple directly, but it’s a good excuse to kill two birds with one stone.
First, I’m saving you money if you happened to be in the market for a pair of AirPods, and second, I never like to give up an opportunity to plug Apple stock. Not that it needs more boosters.
Up 50% over the past 52 weeks, AAPL stock’s in a bit of a lull in 2021 after several years of outsized returns. Don’t waste an opportunity to get in on one of the great companies of our time.
By the time this gets published, Walmart’s Deals for Days will have already gotten underway. Scheduled to take place over four days — June 20-23 — the discount retailer promises “Black Friday-like savings.”
This year, there will be online-only and in-store deals, which means never the twain shall meet. I personally don’t enjoy stepping inside Walmart stores (yes, call me a snob), so I’d be up for the online-only deals.
According to CNET.com, Walmart will sell you an iHome Nova Auto Empty Mopping Robot for $299, 50% off the regular price. I guess that’s a cheaper version of the Roomba.
Anyway, Walmart’s prepared to take Black Friday wherever Amazon’s willing to go. That’s good news for consumers but maybe not so good for the companies selling to the two behemoth retailers.
InvestorPlace’s Tezcan Gecgil recently recommended Walmart’s juicy dividend yield. Its stock has sorely underperformed the entire U.S. market in 2021, however. In Q1, Walmart generated operating income of $6.9 billion on $138.3 billion in sales.
While its stock might be sputtering, the business isn’t.
Retail Stocks to Buy for Amazon Prime Day: Target (TGT)
Target CEO Brian Cornell has done a good job operating and growing the business since taking the job in August 2014; he’s easily one of the top three CEOs in retail.
In an article around the time of Cornell’s hiring, Forbes retail expert and contributor Walter Loeb — whose writing and analysis I respect immensely — suggested that Cornell lacked innovative pizzazz. Almost seven years later, it’s clear Loeb was wide right with his commentary.
In August 2019, I suggested that TGT stock would hit $200 sooner than you think. It took longer than I thought, hitting the target (no pun intended) in March 2021.
I don’t think investors realize just how special Target’s become. It’s not only a Walmart killer; it’s an Amazon killer too.
Anyway, the retailer’s version of Prime Day is Target Deal Days. Online only, it runs from June 20 through June 22.
And what do you know, it’s selling a pair of AirPods (pro version) for $200. According to Today.com, Amazon and Walmart sell the same pair for $169, 32% off the regular price. I suspect it will match its competitors’ price.
From a purely retail perspective, Target’s my favorite of the bunch.
On June 10, Kohl’s announced that it would hold a two-day sale on June 21 and June 22, both online and in its stores. Calling it “WOW Deals,” its press release lists some of the deals available during the sale.
I don’t have kids, but if I did, the 25% off Nike (NYSE:NKE), Under Armour (NYSE:UA, NYSE:UAA), adidas, and Champion Activewear would be the first place I’d take little Jimmy or Janie. Kohl’s is a discount department store so I imagine the prices would be quite low. (Alas, I don’t shop nearly as much as I should or I would know the answer to that last statement definitely.)
In December 2019, I recommended Kohl’s stock after it lost almost 14% in a single month. I felt like some of the innovations CEO Michelle Gass had introduced in the stores weren’t getting the appreciation they deserved. Of course, we now know that my timing was impeccable, with Covid-19 just months away.
If anyone could benefit from a Prime Day sale, Kohl’s definitely could. I continue to believe Gass has the stuff to return its stock to $80, where it traded in the fall of 2018.
Retail Stocks to Buy for Amazon Prime Day: Best Buy (BBY)
USA Today’s Reviewed section recently covered Best Buy’s Bigger Deal event that carries on through June 22. The paper’s reviewers particularly like the Jabra Elite Active 75t workout headphones, which are on sale for $129.99, 28% off the regular retail price. Apparently, Managing Electronics Editor Ryan Waniata thinks they’re the bee’s knees.
I’ve been a fan of Best Buy since Hubert Joly took the CEO job in 2012. At the time, the company was facing possible extinction. The hospitality industry expert came in and delivered nothing but aces.
I look back fondly at my words about Best Buy’s impressive Q2 earnings report in August 2013.
“A year ago, Wedbush analyst Michael Pachter lambasted newly hired CEO Hubert Joly, saying the following about the former hotel and hospitality executive: ‘We find Mr. Joly’s resume unimpressive…He lacks sufficient experience to engineer a turnaround at Best Buy,'” I wrote on Aug. 20, 2013.
“Pachter’s insightful words makes me think of the movie Good Will Hunting when Will Hunting boasts about getting Skylar’s phone number, saying, ‘Well, I got her number. How do you like them apples?’”
Read this article by Forbes contributor Peter Cohan from 2019. It explains why I’ll always have a soft spot for Best Buy, another successful product of Minneapolis.
Bed Bath & Beyond (BBBY)
If you haven’t figured it out by now, Prime Day is officially forever on the calendar. Unless you’re a brand like Lululemon (NASDAQ:LULU), which doesn’t typically discount its items, an annual June 21 and June 22 sale could become a permanent fixture in retail.
Over at Bed Bath & Beyond, CEO Mark Tritton is doing everything he can to bring the home goods retailer back in from the retail wilderness. That includes going head to head with some of the best in retail.
Not to mention, he’s got a bunch of private-label brands he needs to shine a light on — what better way to do that than by having a sale generating foot and online traffic.
As for the actual sale, the deal to take a closer look at is the Shark AI RV2001 Wi-Fi Connected Robot Vacuum with Advanced Navigation. The title alone sounds expensive. However, BBBY will give it to you for the bargain-basement price of $299.99, 33% off the regular price.
It’s still a work in progress; but if it’s good enough for Reddit, it ought to be good enough for everyone.
Retail Stocks to Buy for Amazon Prime Day: Wayfair (W)
Ok, Wayfair’s not exactly competing with the Amazons of the world with this sale. It has been running a clearance sale every June since 2018. It just so happens that this year’s sale coincides with Amazon’s Prime Day.
If you believe that, I’ve got some swampland to sell you in Florida.
According to PennLive, Wayfair’s basically giving away sheets, comforters, furniture, and much more.
I’ll admit, I have been totally and utterly surprised by the online retailer’s ability to not only grow sales in a big way but also to make money doing it. I did not see that coming. In fact, I was so wrong about W stock that in November 2019, I actually recommended investors buy Blue Apron (NYSE:APRN) instead.
Ok, you can laugh. As bad calls go, that was a doozie. Don’t believe me? Wayfair’s stock is up 249% since November 2019. APRN stock is down 38% in the same time frame.
Point. Set. Match!
In fairness to me, it wasn’t so much that I thought Blue Apron was a home run. Rather, I couldn’t see Wayfair ever making a profit. It did. I was wrong.
At current prices, it’s as expensive as it’s ever been. I wouldn’t buy it at these levels, but given my previous call, I could be proven wrong again.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.