Last week was one of the worst weeks for the market this year. The S&P 500 was up more than 15% this year prior to the meltdown. Yet, this last July happened to be the worst July in the past 10 years of market history. Despite the meltdown, some retail stocks are showing a bit of promise.

There are a number of things that led to this market meltdown. First, the employment data revealed that the job market was not as strong as we expected. Out of the 180,000 anticipated new jobs, only 114,000 were added to the labor market in July. This resulted in the highest unemployment rate since October 2021. Another reason for a market meltdown was the Yen carry trade. Historically, the Bank of Japan (BOJ) kept extremely low interest rates. This motivated American investors to borrow money from Japan and invest in U.S. dollars with higher interest rates. When BOJ quickly raised its interest rate last month, the Yen appreciated and American yen shorters took a massive hit.

However, on the other side, a market meltdown presents a phenomenal opportunity to buy stocks. This is especially true for long-term investors who are willing to wait. Below are the three retail stocks to buy before they bounce back again. 

Hot Retail Stocks: Amazon (AMZN)

The miracle growth story of Amazon (NASDAQ:AMZN) is well known. However, the question is whether the e-commerce giant can continue its success in the future. This is especially a hot topic as a lot of the mega tech companies took a major hit in the past month. While there is certainly market volatility and the second quarter earnings proved to be a disappointment to many investors, there is still so much growth potential in the company in the upcoming years. This is backed up by many analysts’ ratings. Even though Morgan Stanley and JPMorgan slightly reduced the price target, they both still kept an overweight rating just last week.  

Despite rising competition in e-commerce, like Walmart in the retail industry, there is no one that will overtake Amazon in e-commerce. As of writing, the stock is down almost 15% this past month, and there is no better time to buy Amazon than right now. 

Lululemon (LULU)

Lululemon (NASDAQ:LULU) is trading at its 52-week low, and the stock is essentially down back to its pre-pandemic price. This year alone, the stock has more than halved, and while it might seem like there is no hope left after years of decline, I would argue that Lululemon might be ready for a surprising comeback in the long term. 

Lulu grew in popularity and dominated the athletic apparel market over the past few years, but as the competition increased, Lululemon has struggled to keep up with its rapid growth. 

If you are only looking at Lulu’s domestic sales, you will find it a disappointment. However, if we are talking about international sales, it becomes a completely different story. In the latest earnings report, Lulu revealed that revenues in the U.S. only went up by 3% year-over-over while international net revenue grew by 35% in that same timeframe. This is primarily due to the 25% increase in global sales Lululemon experienced. While the initial Lulu hype might be gone in the U.S., there is still a lot of room for growth abroad, making Lululemon a good stock to buy on the dip. 

Dick’s Sporting Goods (DKS)

Dick’s Sporting Goods (NYSE:DKS) is another stock that took a hit from the recent market plunge. The stock is up more than 40% this year as of writing, but last month, it took a 7% dip. But unlike other retailers, this appears to be a short-term volatility, and DKS will most likely bounce back soon, which makes it a good buy opportunity. 

In terms of financials, the company looks strong. According to the latest earnings report released in May, Dick’s Sporting Goods beat the analysts’ earnings per share (EPS) expectation by 0.35 cents at $3.30. Revenue reached $3.02 billion, which is a 6% increase from the previous year. This was primarily driven by increased consumer spending on athletic apparel and items. 

Following the positive earnings report from the first quarter, Dick’s Sporting Goods adjusted its guidance for the full year. The sporting company now expects $13.1 to $13.2 billion in total revenue this year. If you are looking for the top retail stocks, start here.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

On the date of publication, Andy Kim 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.