Changing consumer trends and the growing popularity of e-commerce have brought about a significant change in the retail sector. There are challenges in keeping the physical stores running while ensuring the e-commerce business meets consumer expectations and stands strong amid competition. With inflation easing and an anticipated improvement in consumer spending, the retail sector could see a strong improvement in the second half of 2024.

However, this is one sector that will never go out of business. We will always need groceries to cook and essentials to keep our homes clean. Physical stores will continue to remain popular, but the business could be streamlined with an e-commerce offering. The future of retail looks bright. Considering that, here are the three best retail stocks to buy this month. These are fantastic stocks with strong fundamentals, a global presence and a history of outperforming the market. Let’s take a look at them.

Best Retail Stocks to Buy: Walmart (WMT)

Walmart (NYSE:WMT) is one company that has survived the emergence and dominance of e-commerce businesses and yet managed to keep growing. It remained relevant by expanding the e-commerce segment and using its physical stores to fulfill online orders. Walmart is investing heavily in the e-commerce segment and has already seen the returns on its investment.

In the first-quarter results, the company beat expectations and raised the full-year guidance. It saw a 2.4% rise in revenue to hit $141.6 billion, and the membership revenue increased by 10.5%. Its e-commerce sales grew 1%. The management raised the guidance due to an increase in earnings and an improvement in the grocery business.

Walmart’s long-term strategy is to increase Walmart+ subscribers, where it offers discounts and free deliveries, and it has added streaming services to the plan to compete with Amazon (NASDAQ:AMZN) Prime.

With an increase in subscribers, the company will be able to see an improvement in the bottom line. It has achieved success in the grocery segment, and this is one area that will continue to grow, no matter the market situation. However, an improvement in consumer spending could benefit Walmart in the long term.

Trading at $59 today, the stock is up 14% year-to-date and 17% in the past 12 months. It is one of the best retail stocks to buy this month. The steady revenue growth and the growing international business make Walmart a resilient stock to own. On top of that, it boasts a dividend yield of 1.39%, making it attractive for passive income investors. You can hardly ever go wrong with WMT stock.

Amazon (AMZN)

I will never get tired of the Magnificent Seven Amazon stock. It’s one of the best businesses out there today, Amazon has beaten quarterly expectations and reported a solid quarter with the operating income soaring over 200%. From the humble beginning as a bookseller, Amazon has now expanded across multiple segments and has every product you can imagine.

However, this is not the only reason to buy the stock. The results have highlighted two successful segments that could keep growing in the coming years and that is the reason to load up on one of the best retail stocks of the year.

Amazon’s cloud unit, Amazon Web Services has been growing at a double-digit rate and saw a 17% year-over-year (YOY) jump in sales to reach $25 billion. With inflation starting to cool down, there is a chance of seeing a higher growth rate in AWS. It accounts for a huge part of the income and has helped increase the profit margins. The segment generated an operating income of $9.4 billion.

Another segment, the advertising services saw an impressive 24% jump in the quarter and generated $11.8 billion. This segment has been growing over the past two quarters, and I believe it will continue to expand. It was the first report since the company started showing ads on the Prime platform, and it shows that we could expect steady revenue growth from advertising.

Exchanging hands for $186, the stock is up 34% in the past six months and 77% in the past 12 months. Amazon is one of the best stocks to own in 2024.

Costco (COST)

Another resilient stock to own, Costco (NASDAQ:COST) has survived inflation and recessions and is standing strong today. The company is popular because it sells products at a low cost and generates profits from membership fees. The best thing about Costco is that it has not raised membership prices since 2017, which has helped gain new members and maintain high renewal rates.

In the recent quarterly results, the company saw a 92.9% YOY renewal rate, and the total number of cardholders stood at 132 million. It reported a revenue of $58.44 billion, and the net income came in at $3.92 per share, up from $3.3 per share a year earlier. It also saw an 18.4% YOY jump in e-commerce sales in the quarter.

The company is also growing its physical stores and has 875 stores right now. It is expanding across Europe and Asia with more warehouses, and the growing number of stores should help improve revenue. It plans to open stores at another 31 new locations this year. 

Exchanging hands for $743, COST stock might look expensive to many. However, considering its steady revenue growth, resilient business model and attractive membership plan that continues to drive new users, it is worth your money. The stock is up 14% year-to-date and 49% in the past 12 months. It also pays a dividend and has a yield of 0.62%. It announced a hike from $1.02 to $1.16 per share, a 13.7% YOY rise.

On the date of publication, Vandita Jadeja 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.