The COVID-19 pandemic caused disruptions to the back-to-school shopping season in 2020 as parents braced for hybrid and at-home learning.
With many schools expecting to resume in-person learning in 2021, the back-to-school shopping season could be a potential boon for retailers.
Record-Breaking Back-to-School?:Families with children in K-12 schools are expected to spend $848.90 on average for the current back-to-school shopping season, according to NRF Research. This is an increase of $59 per family over the previous year.
Total back-to-school spending could reach $37.1 billion for 2021 compared to a total of $33.9 billion in the previous year. The estimated figure would represent an all-time high.
College student spending is expected to hit a record $71 billion, up $67.7 billion from the prior year.
“We enter the new school year with plans to return to the classroom and retailers are prepared to help Americans find and purchase whatever they need to make this transition as seamless as possible,” NRF CEO Matthew Shay said.
The survey shows that 51% of consumers began back-to-school shopping in July. Thirty-nine percent of survey respondents said they took advantage of large sale events such as Amazon.com, Inc. Prime Day,Target Deal Days and Deals for Days from Walmart Inc.
Back-to-school shopping could see a large increase in electronics purchases, which could benefit retailers offering electronic devices, clothes and school supplies in one location.
Online and department stores were the top destinations for survey respondents tied at 48%. Discount stores (44%) and clothing stores (41%) ranked second and third on the list.
Here are some retail stocks to watch ahead of the potential record-breaking back-to-school shopping season.
Kohl’s:Department store Kohl’s Corporation could benefit from the strong shopping season. The retailer has fared better than several other large department stores and has more than 1,100 locations in 49 states.
Kohl’s reported first-quarter revenue of $3.89 billion, up 60.1% year-over-year. The company raised its full-year guidance on the first-quarter report and the company sees full-year revenue growing to the mid to high teens rate.
Macy’s:Department store retailer Macy’s Inc reported first-quarter comparable sales growth of 62.5% year-over-year.
The company has positioned itself as a “digitally-led omni-retailer” and could benefit from strong in-person and online spending by retailers. Digital sales were up 34% year-over-year in the first quarter and represented 37% of overall sales.
The company also reported the addition of 4.6 million new customers in the first quarter, with 47% of the new customers coming from the digital business.
Macy’s raised its full-year guidance for revenue and earnings per share.
Gap Inc:One of the leading apparel retailers is Gap Inc. The companyreportedfirst-quarter net sales up 89% year-over-year and up 8% compared to pre-pandemic 2019 levels. The company raised its full-year guidance for revenue to grow in the low to mid 20% range year-over-year.
Gap reported strong results for its Old Navy and Athleta brands in the first quarter. Old Navy had sales growth of 27% from the pre-pandemic 2019 levels and was the second-largest apparel brand. Athleta had sales growth of 56% in the first quarter compared to the 2019 levels. Digital sales of Athleta were up 113% from 2019.
A partnership with U.S. Olympian Simone Biles could boost Athleta sales in the second quarter. Old Navy could be a big winner in the back-to-school shopping season with more affordable products and a demographic including several income levels and age groups.
Target:Retailer Target Corporation posteda first-quarter that had comparable sales up 22.9% year-over-year. The first quarter was led by store comparable growth of 18% and strong same-day services growth of 90%. Target gained more than $1 billion in market share in the first quarter.
With the focus on electronics, clothing and online, Target could get a huge boost in sales during the back-to-school shopping season.
American Eagle:Retailer American Eagle Outfitters Inc is seeing a resurgence in demand for its products. First-quarterrevenueof $1.03 billion hit an all-time high for the company. Aerie brand revenue was up 89% year-over-year. Digital sales increased 57% in the first quarter.
The company cited strong demand and accelerated momentum for its products. Executives said the company is tracking ahead of its 2023 targets for operating profit.
Abercrombie & Fitch:Retailer Abercrombie & Fitch Co. is also seeing a resurgence in demand and a partnership with Dixie and Charli D’Amelio could be helping with brand awareness for a new generation of younger shoppers across social media.
The company reported its best-operating income since 2008 in the first quarter of 2021. Net sales were up 61% year-over-year. Digital sales were up 45% year-over-year in the first quarter and represented 52% of total sales. The company said its sales were ahead of pre-pandemic levels.
Comments