In this article, we will look at the 8 High Growth Retail Stocks That Are Profitable in 2024.
Lift in US Retail Sales due to Discretionary Spending
US retail sales increased solidly in September, supporting the view that the US economy possibly maintained a strong growth pace in Q3. Sales growth surpassed forecasts with an increase of 0.4%. A so-called control group of core sales jumped 0.7%. On October 18, James Knightley, chief international economist at ING, appeared on Reuters to talk about the retail sales growth. He said that a number of things are happening in the sector, with the key story being the remarkable resilience showed by the US consumer despite concerns about the job market cooling, high borrowing costs, and savings being exhausted. It looks as if the economy is on track to record a second consecutive 3% growth rate in this current quarter.
However, concerns that disproportionately high spending by higher-income groups is offsetting weaker spending by lower-income households are rising. The top 20% of the American households spend more in dollar terms as compared to the bottom 60% of the households by income. For the people in the top 20%, everything that could go right is going right. However, lower-income households have several pressures weighing them down, with inflation being a constraint.
This divergence in the household performance is a key story in the sector, with experts looking at how long high-income households can continue to offset the intensifying weakness in the lower-income sector. Knightley says that hiring does appear to be slowing in the job market, with jobless claims apparently being on the rise. These factors point to an intensification in the job market slowdown. If that is the case, it is expected to put more and more pressure on the bottom 60% of the households. If these households begin to fear the risk of rising joblessness, then that can be more of a headwind for economic activity felt more broadly.
All in all, it appears to be a mixed picture for the Fed. Being in the middle of the Q3 earnings season, Knightley gives an outlook on future earnings growth and says that it appears that the economy is performing pretty robustly despite headwinds. However, he also says that it is important to note that the equity market looks towards the future at all times, and that the Fed cuts rates for a reason. He feels as if a cooling is coming through, and that the earning estimates in the coming quarters might be even softer than what we are seeing in Q3. He thus think that the pressure is going to be much more telling for US corporate moving through Q4 and through next year.
A Concentrated Consumer or Slowing Consumer?
On August 21, Matt Boss, JPMorgan retail analyst, appeared on ‘Closing Bell’ to discuss the retail sector and the state of the consumer. He said that seeing from the backdrop of the consumer, we are witnessing a concentrated consumer instead of a slowing consumer across the spending front. Consumers are concentrating on events, such as the Back to School season experiencing accelerated traffic in consumers in that segment. Boss also said that the consumer is concentrating on value, highlighting the need for value in brick-and-mortar to offset convenience.
With consumer concentration directed towards key catalysts or holiday shopping periods, trends may show higher “peaks” and greater “lulls” of spending in between catalysts. Consumer shopping is coming up in several different ways, which he considers a by-product of COVID-19. However, Boss says that the reality is that consumer spending remains stable.
He believes that retail stocks that deliver value and have brands that consumers want in convenient settings are likely to experience higher consumer engagement and exhibit signs of consumer stability. Boss’ playbook for growth in the retail segment for the back half of 2024 thus includes innovation, differentiated product, value, and convenience in the e-commerce front.
In his optimism across the sector, Boss sees more winners than losers within the department store and specialty segment. He also believes that the consumer has been in a selective recession, with the low-income consumer being under immense pressure. The high-income and middle-income consumers remain plentiful on the spending side.
With these trends in view, let’s look at the 8 high growth retail stocks that are profitable in 2024.
8 High Growth Retail Stocks That Are Profitable in 2024
Our Methodology
To compile the list of 8 high growth retail stocks that are profitable in 2024, we used the Finviz stock screener, Yahoo Finance, and Seeking Alpha. Using the screener, we compiled an initial list of 40 retail stocks with 5 years of positive sales growth (at least high single digits). Next, using Yahoo Finance and Seeking Alpha, we sourced the 5-year net income and revenue growth rates along with the TTM net income (at least $100 million) to ensure profitability in 2024. Lastly, we ranked our stocks based on the number of hedge fund holders in Q2 2024 as per Insider Monkey’s database. The list is ranked in ascending order of the number of hedge fund holders.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8 High Growth Retail Stocks That Are Profitable in 2024
8. Boot Barn Holdings, Inc. (NYSE:BOOT)
5-Year Net Income Growth: 29.29%
5-Year Revenue Growth: 16.34%
TTM Net Income: $151.65 million
Number of Hedge Funds as of Q2 2024: 23
Boot Barn Holdings, Inc. (NYSE:BOOT) is a lifestyle retailer that sells western and work-related apparel, footwear, and accessories in the US. Its operations are divided into two segments: retail stores and e-commerce. The retail segment functions as a specialty retail store, while the e-commerce segment sells merchandise through the Internet.
The company sells an assortment of western shirts, denim, cowboy hats, belt buckles, belts, western-style jewelry, and accessories. In addition, its work assortment spans denim, overalls, rugged footwear, shirts, and outerwear. Boot Barn Holdings, Inc. also operates other brands, including Carhartt, Dickies, Wolverine, and Hawx. It has around 403 stores in 45 states.
The company is running on a robust execution model, increasing revenue by more than 10% in Q1 2025 with sales growth. This growth was driven by new store sales growth and same-store sales, exceeding the company’s high end of the guidance range across every metric, including a significant beat of earnings per share. Same-store sales grew by 1.4% compared to the prior year period, comprising an increase of 0.8% in retail store same-store sales and growth of 6.7% in e-commerce same-store sales.
The sequential improvement in consolidated same-store sales growth has been consistent, building strong sales momentum for the company. Despite potential macroeconomic challenges, the company is focusing on its strategic initiatives and is well-positioned for long-term success.
The company’s net sales increased by 10.3% compared to the prior-year period, reaching $423.4 million. Boot Barn Holdings, Inc. (NYSE:BOOT) is continuing its expansion strategy, opening 11 new stores in the quarter and bringing its total count to 411. It takes the eighth spot on our list of the 8 high growth retail stocks that are profitable in 2024.
7. BJ’s Wholesale Club Holdings (NYSE:BJ)
5-Year Net Income Growth: 20.55%
5-Year Revenue Growth: 9.22%
TTM Net Income: $532.35 million
Number of Hedge Funds as of Q2 2024: 34
BJ’s Wholesale Club Holdings (NYSE:BJ) is a membership-only warehouse chain offering an elaborate assortment of goods. Its merchandise offerings include a wide assortment divided into grocery and general merchandise and services. It also offers specialty services and operates around 245 clubs and 180 gas locations across 20 states.
The company has solid expansion plans, and is on the path to opening new clubs in key market locations. Such initiatives are expected to expand the company’s share in the warehouse club market and drive additional sales growth.
It is operating on a robust profitability model, with revenue in Q2 2024 increasing by 5% compared to 2023 and reaching $5.2 billion. The primary drivers of this growth are higher membership renewals, improved same-store sales, and strong performance in digital channels.
Continual growth in membership fees, strong membership renewal rates, and growth in the company’s premium tier memberships reflect its competitive market edge. Its membership fees grew 9% in Q2 2024. BJ’s Wholesale Club Holdings (NYSE:BJ) is also increasing attention to value and its private-label items. The company ranks seventh on our list of the top high growth retail stocks that are profitable in 2024.
TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in its first quarter 2024 investor letter:
“Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, or premium brands. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) operates membership warehouse clubs. Its shares gained 14% after it reported better-than-expected comparable sales growth, in-line revenues, and earnings for its fiscal fourth quarter. Highlights of the quarter were increased membership and customer traffic.”
6. Floor & Decor Holdings, Inc. (NYSE:FND)
5-Year Net Income Growth: 12.04%
5-Year Revenue Growth: 18.59%
TTM Net Income: $209.7 million
Number of Hedge Funds as of Q2 2024: 34
Floor & Decor Holdings, Inc. (NYSE:FND) is a multi-channel specialty retailer that sells hard surface flooring, related accessories, and commercial surfaces. It operates five design studios and around 230 warehouse-format stores across 36 states. Its offerings are for commercial businesses, professional installers, as well as do-it-yourself (DIY) and buy-it-yoursef (BIY) homeowners.
With housing affordability remaining a hurdle for most buyers due to record-high home prices and increased mortgage rates, the company is not seeing the resurgence in hard surface flooring demand that it had expected. However, it realizes the short-term challenges posed by the current market conditions and is thus adapting its strategies accordingly. It is committed to executing strategies to grow its market share, and is working to maintain a strong balance sheet and improve its profitability.
The company opened five new warehouse-format stores in Q2 2024, ending with five design studios and 230 warehouse stores, compared to five design studios and 203 warehouse stores in the same period last year. It plans to open 30 new warehouse stores for the full fiscal year 2024, compared to its prior expectation of opening 30-35 stores.
Floor & Decor Holdings, Inc. (NYSE:FND) believes that slowing its new store opening pace to around 25 new warehouse stores by fiscal 2025 is prudent, considering current market conditions. It is pivoting most of its store expansion to larger existing markets with higher brand awareness.
Its fiscal 2025 plans include focusing on opening warehouse stores with the highest potential for success in this weak environment, thereby maximizing its return on capital. It is using this period as an opportunity to align capital spending growth and sales projections with the current environment. These initiatives have allowed the company to slash its fiscal 2025 capital investment per new store and increase the expected return for this store class by more than 200 basis points.
Madison Mid Cap Fund stated the following regarding Floor & Decor Holdings, Inc. (NYSE:FND) in its Q3 2024 investor letter:
“The top five contributors for the quarter were Liberty Broadband, Floor & Decor Holdings, Inc. (NYSE:FND), Moelis, Brown & Brown, and Waters. Floor & Décor continues to face a challenged sales environment, given a weakening consumer and housing market. However, potentially positive implications from lower interest rates and market share gains from a large competitor closing stores has investors more optimistic that results will improve.”
5. Casey’s General Stores, Inc. (NASDAQ:CASY)
5-Year Net Income Growth: 18.50%
5-Year Revenue Growth: 12.47%
TTM Net Income: $512.93 million
Number of Hedge Funds as of Q2 2024: 42
Casey’s General Stores (NASDAQ:CASY) is a convenience retailer that operates convenience stores in 17 states under the names Casey’s and Casey’s General Store. It offers a broad merchandise range, including food items, tobacco and nicotine products, health and beauty aids, nonfood items, automotive products, and more. It operates more than 2,600 convenience stores, and boasts popular brands such as Lone Star Food Store and GoodStop.
It generated $180 million in net income, undergoing a 6% increase in Q1 2025. The company’s EBITDA also grew by 9% compared to the prior year, reaching $346 million. Q1 2025 was another great quarter for the company, highlighting its strong business model. It expanded gross profit dollars while growing its store base.
The company also saw continued strength with its prepared food innovation and margin expansion inside the store. This was primarily driven by the general merchandise and grocery category. These positive results show that the company’s three-year strategic plan is credible and achievable.
In addition, Casey’s General Stores (NASDAQ:CASY) has a strong balance sheet, allowing it to continue with its pending acquisition of Fikes. Overall, the company is seeing positive momentum in its offerings, especially in non-alcoholic and alcoholic beverages, including liquor. Its 1,500 liquor licenses give it a strategic advantage.
It now expects store growth to reach around 270 units for the fiscal year, up from its previously disclosed 100 units. The company takes the fifth spot on our list of the 8 high growth retail stocks that are profitable in 2024. ClearBridge SMID Cap Growth Strategy stated the following regarding Casey’s General Stores, Inc. (NASDAQ:CASY) in its Q2 2024 investor letter:
“Stock selection in the consumer staples sector also proved beneficial, primarily driven by our holdings in Casey’s General Stores, Inc. (NASDAQ:CASY) and BJ’s Wholesale Club (BJ). An operator of gas stations and convenience stores, Casey’s is now reaping the rewards of its aggressive reinvestment in its stores over the past decade, building its private label brand and broadening its product offerings. This has not only helped boost same-store sales but also encouraged repeat traffic, allowing the company to buck broader industry trends toward contraction in gas volumes and margins. Finally, the company’s strategy of choosing locations in smaller and more remote markets has afforded it stronger pricing power.”
4. Burlington Stores, Inc. (NYSE:BURL)
5-Year Net Income Growth: 0.22%
5-Year Revenue Growth: 8.13%
TTM Net Income: $428.28 million
Number of Hedge Funds as of Q2 2024: 42
Burlington Stores, Inc. (NYSE:BURL) is an off-price retailer that sells branded apparel, footwear, accessories, and home merchandise at low prices. It offers an elaborate array of fashion-focused, in-season merchandise. This includes ready-to-wear apparel for men and women, beauty, footwear, baby, accessories, toys, home, coats, and gifts.
The company operates through five distribution centers, two of which are located on the East Coast in New Jersey and three on the West Coast in California. In addition, Burlington Stores, Inc. has a third-party arrangement for the use of pool point facilities. Burlington Stores, Inc. (NYSE:BURL) operates more than 1,000 stores, principally under the name Burlington Stores.
It is running on solid fundamentals, experiencing a 13% growth in total sales in Q2 2024 compared to Q2 2023. This was on top of the 9% total sales growth versus Q2 2022. The company’s expansion strategy is working, as new stores are a crucial driver of this growth. It added 36 net new stores in Q2, ending the quarter with 1,057 locations. For 2024 as a whole, the company is on track to open 100 net new stores in addition to 30 relocations. On average, it expects its new stores to run at around $7 million in sales in their first full year.
Comp sales growth is another driver of the company’s top-line sales. Comp-store sales for Q2 2024 increased by 5% versus its guidance of flat to 2%. Burlington Stores, Inc. (NYSE:BURL) also expanded its operating margin by 160 basis points in the quarter compared to last year. The primary drivers of this expansion were lower markdowns, faster inventory turns, and faster-than-expected progress in its supply chain efficiency initiatives. The company’s well-ahead-of-planned sales growth and solid margin expansion drove strong earnings growth in Q2. The company ranks fourth on our list of the 8 high growth retail stocks that are profitable in 2024.
Argosy Investors made the following comment about Burlington Stores, Inc. (NYSE:BURL) in its Q3 2023 investor letter:
“Burlington Stores, Inc. (NYSE:BURL) participates in the off-price retail category and competes against well-known players such as TJ Maxx and Ross Stores. BURL recently suffered from an inventory overhang that dented margins and is also suffering from a slowdown in same-store sales. With that said, the company has the capacity to double its stores, double its margins to levels consistent with peers, and expand same-store sales growth. On normalized margins, which the company last achieved in fiscal 2019, BURL is trading at ~10x earnings, with the potential to grow top-line low double digits, increase bottom line mid-teens, and increase EPS high teens over time.”
3. Lululemon Athletica Inc. (NASDAQ:LULU)
5-Year Net Income Growth: 25.02%
5-Year Revenue Growth: 22.78%
TTM Net Income: $1.63 billion
Number of Hedge Funds as of Q2 2024: 45
Lululemon Athletica (NASDAQ:LULU) designs, distributes, and sells athletic apparel, accessories, and footwear. Its apparel segment focuses on a healthy lifestyle and athletic activities, and also offers fitness-inspired accessories. The company’s operations are divided into company-operated stores and direct-to-consumer segments. Its athletic apparel, accessories, and footwear are sold through various channels, including direct-to-consumer via e-commerce, company-operated stores, outlets, sales to wholesale accounts, e-commence, license and supply arrangements, and sales from temporary locations.
Lululemon Athletica (NASDAQ:LULU) manages stores in the United States, Canada, Australia, the United Kingdom, Germany, South Korea, and others. It also operates Lululemon Studio, which offers in-home connected fitness and related content subscriptions. The company is running on strong fundamentals. By merchandise category, it experienced a 6% growth in women’s, 11% in men’s, and 7% in accessories in FQ2 2025. Its EPS also increased by 18%, primarily driven by a strong gross margin.
It is demonstrating continued confidence in the business due to its growing popularity. It repurchased $584 million of stock in FQ2 2025, bringing it to $1.2 billion year-to-date. Its regional performance is also improving, with continued strength in international markets as the brand continues to resonate with people across the globe.
Expanding its business outside of North America is one of the largest opportunities for the company, and it is on track to quadruple its international revenue from 2021 levels by the end of 2026. This strong momentum can also be seen reflected in a 29% growth (31% in constant currency) in international revenue. Mainland China experienced 34% or 37% in constant currency growth, with the rest of the world growing by 24% of 27% in constant currency.
Lululemon Athletica (NASDAQ:LULU) is attracting new guests to the brand through its several e-commerce platforms and stores in mainland China, leading to robust second-quarter growth. It has a solid operating model and innovative product offering, leading to a positive outlook for the company. It takes the third spot on our list of the 8 high growth retail stocks that are profitable in 2024.
Middle Coast Investing stated the following regarding Lululemon Athletica Inc. (NASDAQ:LULU) in its Q2 2024 investor letter:
“I mentioned last quarter and higher above that I like buying quality stocks on sale. Lululemon Athletica Inc. (NASDAQ:LULU), the 2nd worst performer in the S&P 500 this year, qualifies. I published a full thesis on the stock before its most recent earnings, but the basics: the yoga pants and clothing company has had an amazing post-pandemic run that is approaching its end. Its growth in the US is slow/non-existent at the moment, but it is growing very fast in China and Europe. I think that international growth is likely to endure, and that its US slowness is likely to be temporary. Lululemon shares are not ‘cheap,’ but they are on sale for an average price, and I think the company will grow faster than average over the next five years. I would be wrong if Lululemon is a fad gone bust, or faces a huge post-pandemic hangover as people get used to leaving the house more. We’ll see.”
2. Target Corporation (NYSE:TGT)
5-Year Net Income Growth: 7.31%
5-Year Revenue Growth: 6.90%
TTM Net Income: $4.49 billion
Number of Hedge Funds as of Q2 2024: 52
Target (NYSE:TGT) is a retail giant that operates more than 2,000 discount department stores and hypermarkets across the US and Canada. It serves its customers, referred to as guests, an array of items, including everyday essentials, fashionables, differentiated merchandise at discounted prices, and an array of general merchandise and food. Its merchandise categories span apparel and accessories, food and beverages, home furnishing and decor, and others.
The company has a strong operational model in place, and holds significant market popularity that gives it a competitive edge. Its comparable sales in Q2 2024 were driven entirely traffic, increasing by 2%. Its store and digital channels also saw growth in Q2, further solidifying the company’s presence in the market.
In addition, sales in apparel, one of its key categories, rose by 3%. Its discretionary categories comprise a significant portion of its revenue and are also improving. With traffic growth in all six merchandising categories of the company, customers seem to be coming back to Target (NYSE:TGT).
Overall, Target (NYSE:TGT) is focusing on controlling what can be controlled and is directing attention to strong execution and retail fundamentals. It is also working on expanding its operating margin rate, aiming to move beyond its pre-pandemic annual rate of 6%. The company is also committed to continued disciplined capital deployment.
It is also focusing on providing value for its guests, and directing attention to low everyday prices. It slashed prices on frequently purchased items, and is highlighting further compelling deals for its Target Circle members. To deliver more value to its guests, it is offering Target Circle cardholders additional 5% savings, sourcing high quality owned brands, and is delivering convenience and ease with Target Circle 360 and Drive Up.
Carillon Eagle Growth & Income Fund stated the following regarding Target Corporation (NYSE:TGT) in its Q2 2024 investor letter:
“Target Corporation’s (NYSE:TGT) sales continue to feel the consumer softness in discretionary goods. In addition, while margins are recovering, they are not up to expectations. Encouragingly, sales are sequentially increasing, and comparable sales are expected to get easier as Target enters the back half of the year.”
1. CVS Health Corporation (NYSE:CVS)
5-Year Net Income Growth: 10.68%
5-Year Revenue Growth: 9.87%
TTM Net Income: $7.19 billion
Number of Hedge Funds as of Q2 2024: 60
CVS (NYSE:CVS) is a health solutions retailer with operations in four segments: health services, healthcare benefits, pharmacy & consumer wellness, and corporate/other. The company has strong fundamentals, generating over $91 billion in total revenue and $8 billion in operating cash flow in the first half of 2024. It is continually executing strategies to boost its integrated value, and most of its businesses are running smoothly.
CVS has identified a multi-year opportunity to deliver around $2 billion in savings. It will do so by increasing automation and using artificial intelligence across its enterprise, continuing to rationalize its business portfolio, and optimizing and streamlining its processes. Savings through such initiatives are expected to advance the company on the path to profitability and allow it to invest in new opportunities.
The company serves more than 186 million people and increased the number of people availing of two or more CVS Health offerings to 57.5 million in the first half of 2024, undergoing a 2.5 million consumer increase. It also boosted its digital reach, with approximately 60 million unique digital customers using its platform to purchase wellness products, fill prescriptions, and schedule health services appointments.
CVS (NYSE:CVS) is taking various steps to build positive momentum for 2025. These include its disciplined approach to Medicare Advantage pricing, accelerating the integration of its healthcare delivery assets, progressing on its innovative pharmacy model and biosimilar strategy, and improving operational performance in its healthcare benefits segment. It ranks fifth on our list of the 8 high growth retail stocks that are profitable in 2024.
Ariel Global Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q2 2024 investor letter:
“American healthcare company, CVS Health Corporation (NYSE:CVS), also declined following disappointing earnings results and a subsequent reduction in full year guidance. The miss was primarily due to increased utilization of Medicare Advantage plans and weakness in the health services segment driven by the loss of a large client and continued pharmacy client price improvements. In response, management reiterated its focus on improving margins and enhancing its positioning in Medicare Advantage. CVS believes the program can remain an attractive business for Aetna and CVS Health over time and will construct its bid for 2025 as a multi-year repricing opportunity across plan level benefits. Meanwhile, CVS continues to return capital to shareholders through dividends and a recent accelerated share repurchase transaction”.
Overall, CVS ranks first among the 8 high growth retail stocks that are profitable in 2024. While we acknowledge the potential of retail stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CVS but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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