To some investors, it may be counterintuitive to buy brick-and-mortar retail stocks. After all, this is the age of e-commerce, and there are signs consumer spending is cooling.
Costco Ask around and you’re bound to find one of those people who worships at the cult of Costco COST, +0.32% for grocery items including rotisserie chickens or its Kirkland brand vodka. Investors have lots of reasons to keep coming back, too, as the shares have risen more than 90% in the past five years, nearly double the returns of the S&P 500 SPX, +0.69% in the same period.
Five Below Another growth-oriented name in retail is discounter Five Below FIVE, -1.00% a store that offers a host of toys, school supplies, snacks and décor all for less than $5. I don’t pretend to understand the appeal of squishy stuffed animals or groaner puns on graphic T-shirts. But what I do understand is the profit potential, as this stock has risen more than 200% in the past two years.
In addition to strong fundamentals and a great niche in Western wear, a luxury category where quality boots and hats can regularly run $500 or more, Boot Barn also has more accessible consumer lines as well as work wear that ensures a diverse product portfolio that will keep it in favor. Whether Starboard succeeds in agitating for a spin-off of Family Dollar to cut and run or whether the headlines simply spur management into making hard choices for the betterment of shareholders, either solution looks very good these days on Wall Street.