The chapter of 2017 is about to conclude, and it reads as an eventful year for stock market based on encouraging economic indicators and improved corporate results. Before we kick off 2018, retailers have some more good news to cheer about.

The latest addition to the streak of encouraging economic indicators is the holiday season sales data from Nov 1 to Dec 24, 2017, reflecting an increase in consumer spending. According to MasterCard SpendingPulse, sales (excluding automobiles) during the period jumped 4.9% compared with 3.7% rise in the prior-year period. This marks the biggest year-over-year increase in holiday spending since 2011.

Per report, sales of electronics and appliances, jewelry, and home furnishings rose 7.5%, 5.9% and 5.1%, respectively. Meanwhile, specialty apparel as well as department stores witnessed “moderate” sales increase. Further, market analysts are also optimistic about the holiday sales as unemployment is at its lowest level in 17 years and consumer sentiment has touched the highest level since 2000.

The data by MasterCard SpendingPulse fared better than the National Retail Federation (“NRF”) projection of 3.6-4% rise in November and December sales (excluding autos, gas and restaurant sales) and eMarketer forecasts 3.1% jump in holiday sales.

Following the news, retailers like Macy’s, Inc. M, Kohl’s Corporation KSS, J. C. Penney Company, Inc. JCP, Best Buy Co., Inc. BBY and Wal-Mart Stores, Inc. WMT jumped 4.6%, 6%, 5.4%, 1.4% and 1%, respectively.

Out of the stocks mentioned above, Wal-Mart carries a Zacks Rank #2 (Buy), while Macy’s, Kohl’s Corporation, J. C. Penney Company and Best Buy Co carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Summing Up

Retail sector is hogging all the attention, and this time for good reasons. For the time being, the expression “retail apocalypse” appears to be a thing of past. The sector has certainly been facing the brunt of heightened online competition, lower footfall and changing consumer spending patterns but of late the tables are turning in favor of the retailers.

Analysts believe that a buoyant stock market, gradual wage acceleration, improved employment picture and modest inflation are enough to trigger consumer spending. All these sound favorable for retailers, who try to make the most of the season that accounts for a sizeable chunk of yearly revenues and profits.

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Best Buy Co., Inc. (BBY): Free Stock Analysis Report
 
Wal-Mart Stores, Inc. (WMT): Free Stock Analysis Report
 
Macy’s Inc (M): Free Stock Analysis Report
 
J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
 
Kohl’s Corporation (KSS): Free Stock Analysis Report
 
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