The fourth and final quarter of 2023 is upon us and the year-end holidays are fast approaching. That could mean a boost in the sales of many businesses, from retailers to airlines and e-commerce companies. In mid-September, accounting firm Deloitte released a report forecasting that holiday retail sales will rise between 3.5% and 4.6% this year, while e-commerce holiday sales are predicted to grow between 10.3% and 12.8%. While that’s a slowdown from last year due mostly to inflation and high interest rates, holiday sales are still expected to total up to $1.56 trillion between November and the end of December this year. As usual, some companies can be expected to benefit more than others from the surge in year-end consumer spending, especially around the Black Friday and Cyber Monday shopping events. Here are three stocks to buy before the holiday shopping boom gets underway.
E-commerce leader Amazon (NASDAQ:AMZN) has announced plans to hire 250,000 additional workers for the holidays this year and boost the pay of warehouse and delivery workers to $20.50 an hour from $19. Additionally, Amazon is planning to kick off the holiday shopping season with its latest Prime Day sales event scheduled to take place on October 10 and 11 of this year.
The people hired for the holidays will include full-time, part-time and temporary seasonal workers, according to the company. Amazon appears bullish about the holidays this year, hiring 100,000 more workers than in the final quarter of last year to fulfill online orders. Analysts say Amazon’s hiring plans and autumn Prime Day sales event counter perceptions that the U.S. economy is slowing and consumers are spending less.
Amazon’s last Prime Day sales event held in July generated more than $12 billion in sales, making it the most successful Prime Day ever for Amazon. AMZN stock has increased 48% year-to-date.
American Airlines (AAL)
The latest industry data shows that 30% of Americans plan to travel during the year-end holidays, the same proportion that traveled between Thanksgiving and New Year’s Eve in 2022. And 24% of Americans said they plan to spend Christmas this year at a vacation destination. That is good news for American Airlines (NASDAQ:AAL), which is the largest carrier not only in the U.S. but the entire world. Strong holiday travel intentions among consumers come as the company rebounds from the Covid-19 pandemic.
American Airlines reported second-quarter earnings that beat Wall Street forecasts across the board as travel demand surged globally. The carrier announced earnings per share (EPS) of $1.92 versus $1.59 expected by analysts. Revenue in Q2 totaled $14.06 billion compared to $13.74 billion forecasted. Additionally, the airline raised its forward guidance for the remainder of 2023, saying it expects the current travel boom to continue throughout Q4 and the upcoming holidays.
AAL stock has gained 7% in the past 12 months.
Discount retailer Walmart (NYSE:WMT) is already doing well this year as financially stressed consumers turn to its stores for everything from groceries to clothing and electronics. Walmart could get an even bigger boost from year-end holiday shopping. The Black Friday and Cyber Monday holiday sales events tend to supercharge Walmart’s sales. The company is already advertising its holiday deals for this year.
While Walmart hasn’t announced its holiday hiring intentions just yet, the retailer brought on an additional 40,000 workers to help it manage sales during the busy Christmas shopping season last year. That was actually down more than 70% from 2021 due to concerns about a slowing economy. This year, analysts expect Walmart’s holiday hiring to rebound. Walmart enters the final quarter of the year in good shape, having reported strong financial results due to continued strength in its grocery sales and online spending.
WMT stock has increased 21% over the last 12 months.
On the date of publication, Joel Baglole did not hold (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.