The retail industry in 2025 has been doing surprisingly well. Growth has started to accelerate for many companies and AI is allowing a lot more efficiency in the supply chain. The macros have also cooperated with the retail industry as the strong labor market with positive wage growth has pushed more consumer spending.
Retailers are capitalizing on this by expanding into new markets and spending more on AI-powered supply chains and checkout systems. Plus, there’s chatter of interest rates coming down this year, especially with pressure from the Trump administration. This could boost the sector even more.
The convergence of these factors has created fertile ground for retail stocks. It is worth looking into those that have performed the best so far this year, as the market has rewarded these companies for good reasons.
A glossy storefront of a value retailer, filled with fashionable apparel and accessories.
Methodology
For this article, I screened the top-performing retail stocks year-to-date. Stocks that I have covered recently will be excluded from this list.
I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds invest in? 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).
15. Stitch Fix Inc (NASDAQ:SFIX)
Number of Hedge Fund Holders In Q3 2024: 15
Stitch Fix Inc (NASDAQ:SFIX) is an online personal styling company.
It has had a strong 2025 so far due to Q1 2025 earnings beating estimates and a guidance hike. Adjusted EBITDA came in at $13.5 million and gross margin expanded 180 bps year-over-year to 45.4%. Revenue per active client rose to 4.9% and offset an 18.6% year-over-year decline.
Plus, full-year 2025 guidance was raised to $25 million to $36 million in adjusted EBITDA. Moreover, it has seen a 23% reduction in warehouse costs and 21% lower styling costs per fix, along with SG&A expenses falling 18.1% year-over-year.
It now has a path to positive free cash flow and revenue growth, so investors seem quite optimistic.
The consensus price target of $3.96 implies 19.49% downside.
SFIX stock is up 14.15% year-to-date.
14. 1stdibs.com Inc (NASDAQ:DIBS)
Number of Hedge Fund Holders In Q3 2024: 11
1stdibs.com Inc (NASDAQ:DIBS) is an online marketplace for luxury design products.
The stock is up so much so far in 2025 due to its solid financial performance and growth momentum, along with bullish coverage from analysts.
Q3 2024 results showed revenue grew to $21.2 million at 3% year-over-year and the fiscal 2025 plan expects mid-single-digit revenue growth. Institutional investors have been buying the stock, with JPMorgan Chase boosting their holdings by 151.6% in Q3 2024, along with Barclays, Geode Capital, and State Street all increasing their stakes.
Regardless, the company is still unprofitable and profitability is unlikely in the near term.
The consensus price target of $8 implies 97.53% upside.
DIBS stock is up 14.41% year-to-date.
13. JD.com Inc (NASDAQ:JD)
Number of Hedge Fund Holders In Q3 2024: 75
JD.com Inc (NASDAQ:JD) is the largest retailer in China in terms of revenue.
The stock is up markedly so far in 2025 as the broader Chinese stock market has been recovering. Plus, the company itself has proposed acquiring the remaining 40% stake in logistics partner Dada Nexus for $51.9 million.
In addition, Q3 revenue rose 5.1% year-over-year to $37.1 billion and net income increased 47.8% to $1.7 billion. Operating margin also increased to 4.6%. Q3 2024 revenue still missed estimates due to weak Chinese consumption.
It bought back $3.3 billion in shares in 2024 and authorized a new $5 billion in buybacks through 2027, which should lift the stock more.
The consensus price target of $41.36 implies 2.96% upside.
JD stock is up 15.86% year-to-date.
12. Sea Ltd (NYSE:SE)
Number of Hedge Fund Holders In Q3 2024: 58
Sea Ltd (NYSE:SE) is a company that does e-commerce, digital entertainment (like gaming), and fintech.
The stock is up so much so far this year as revenue growth has been accelerating, and the company is starting to turn profitable. The e-commerce platform reported a revenue increase of 45% year-over-year, along with GMV increasing by 25%. It also reported positive adjusted EBITDA for the first time.
Its digital financial services segment has also been doing well, with the loan portfolio reaching $4.6 billion after growing 73.2% in 2024. Revenue is up 38% and non-performing loans have declined.
The gaming segment has done well too, with Garena’s daily active users surpassing 100 million in 2024 as Free Fire gains more popularity.
The consensus price target of $91.21 implies 25.84% downside.
SE stock is up 15.93% year-to-date.
11. MercadoLibre Inc (NASDAQ:MELI)
Number of Hedge Fund Holders In Q3 2024: 87
MercadoLibre Inc (NASDAQ:MELI) is Latin America’s largest e-commerce and fintech ecosystem.
The stock is up significantly year-to-date as its revenue surged 35.3% year-over-year to $5.31 billion, with net income up 10.6% to $397 million. The total payment volume also grew 34%.
Furthermore, marketplace unique buyers grew at the fastest pace since 2020 with 60.8 million unique buyers, up 21% year-over-year. And as with most ad-related companies in the past year, MercadoLibre is seeing a surge in its advertising revenue. Advertising revenue grew 37% year-over-year.
The consensus price target of $2,244.69 implies 12.4% upside.
MELI stock is up 17.42% year-to-date.
10. PDD Holdings Inc (NASDAQ:PDD)
Number of Hedge Fund Holders In Q3 2024: 78
PDD Holdings Inc (NASDAQ:PDD) operates Pinduoduo and Temu. The latter is one of the most popular apps in the West.
The stock is up markedly so far in 2025. The sentiment is especially better after Trump reversed his decision to close the de minimis exemption on items below $800. The reinstatement of de minimis means that people will continue to be able to buy very cheap items from Temu.
Moreover, Q3 2024 revenue grew 44% year-over-year to $14.2 billion and net income grew 60.8% year-over-year. PDD Holdings’ cash reserves are now at $44 billion against $1.46 billion of debt. It is also partnering up with European logistics firms to reduce its delivery time.
The consensus price target of $173.4 implies 51.75% upside.
PDD stock is up 17.82% year-to-date.
9. Maplebear Inc (NASDAQ:CART)
Number of Hedge Fund Holders In Q3 2024: 55
Maplebear Inc (NASDAQ:CART) operates as Instacart. The company provides online grocery delivery services.
The stock has delivered solid gains so far this year as the e-commerce sector has gained a lot of confidence. Q3 2024 earnings beat analyst expectations with $0.45 in EPS vs. a $20.86 loss in Q3 2023. Revenue grew 11.5% year-over-year to $852 million and also beat estimates.
Maplebear has $1.31 billion in cash reserves and no debt, plus management expects the growth to continue, with 8 to 10% growth in gross transaction value. The online grocery market is still pretty underpenetrated, so there’s a lot of room for growth.
The consensus price target of $48.96 implies 0.51% downside.
CART stock is up 18.81% year-to-date.
8. Alibaba Group Holding Ltd (NYSE:BABA)
Number of Hedge Fund Holders In Q3 2024: 115
Alibaba Group Holding Ltd (NYSE:BABA) is an e-commerce company that is also aggressively expanding into the data center and AI sector.
The stock has delivered solid gains so far in 2025 as the broader Chinese stock market continues to surge and the company’s involvement with AI and data centers gains recognition, especially after it stated that its latest AI model was better than that of DeepSeek, though it failed to make as big of a splash.
Regardless, revenue from AI-related cloud services grew by triple digits in Q3 2024, and it will likely continue to grow fast in Q4 since China has been pushing its domestic AI models, almost all of which will require data centers in China. Q4 results are expected to be posted on February 20, 2025.
The consensus price target of $115.86 implies 11.72% upside.
BABA stock is up 22.08% year-to-date.
7. Torrid Holdings Inc (NYSE:CURV)
Number of Hedge Fund Holders In Q3 2024: 12
Torrid Holdings Inc (NYSE:CURV) is a retailer that specializes in plus-size apparel for women.
The stock is up a lot so far this year as it announced progress in its turnaround strategy in January. The first phase is focused on improving its supply chain and inventory management, whereas the second phase is to scale the platform and expand its market share.
Analysts expect 29% EPS growth in FY2025 to outpace the broader retail sector, and they expect another 76% growth in FY2026. Moreover, despite a 4.2% year-over-year decline in revenue in Q3 2025, the company narrowed its net loss to just $1.19 million and improved gross margins to 36.1%.
The consensus price target of $4.5 implies 30.02% downside.
CURV stock is up 22.56% year-to-date.
6. Tapestry Inc (NYSE:TPR)
Number of Hedge Fund Holders In Q3 2024: 38
Tapestry Inc (NYSE:TPR) is a luxury fashion holding company.
The stock is up significantly year-to-date after blockbuster Q2 2025 earnings. It reported $2.2 billion in revenue as Coach posted 11% in sales growth and outperformed peers like Michael Kors.
Gross margin expanded to 74.45% and adjusted EPS of $2 beat estimates, while full-year 2025 guidance was raised. Revenue is now projected at $6.85 billion for this year, up from $6.75 billion. The EPS forecast was also raised to $4.85 to $4.9 from $4.5 to $4.55.
The consensus price target of $73.17 implies 8.86% downside.
TPR stock is up 23.04% year-to-date.
5. Baozun Inc (NASDAQ:BZUN)
Number of Hedge Fund Holders In Q3 2024: 5
Baozun Inc (NASDAQ:BZUN) is an e-commerce company.
It has been surging due to the bullish sentiment in China as monetary policy gets looser there. Moreover, Q3 2024 earnings came in strong, and margins have improved quite a bit.
It posted 12.8% year-over-year revenue growth to $293.1 million and its operating margin improved after a 40% surge in high-margin digital marketing and IT products.
Plus, Baozun has partnered with Douyin (TikTok) and livestream sales account for about a fifth of the company’s total GMV. Analysts now project 5.2% annual revenue growth over the next three years, and while this does lag behind China’s broader e-commerce growth of around 11%, its pivot to live streaming could make it a lot more profitable.
The consensus price target of $3.2 implies 5.04% downside.
BZUN stock is up 23.9% year-to-date.
4. Arhaus Inc (NASDAQ:ARHS)
Number of Hedge Fund Holders In Q3 2024: 13
Arhaus Inc (NASDAQ:ARHS) is a retailer of artisan-crafted home furnishings.
The stock has delivered stellar returns so far in 2024 after it raised its 2024 guidance. It raised its full-year 2024 net revenue forecast to $1.27 billion to $1.28 billion. This is up $35 million from prior guidance.
The company cited stronger-than-expected Q4 demand. Demand comparable growth reached 6% in Q4, with November+December comps surging 10% despite a weak October. Full-year comparable growth is still negative but has been improving.
In addition, CFO Dawn Phillipson stepped down in January, but analysts are confident the finance team can continue to do well. The transition didn’t derail the bullish sentiment here.
The consensus price target of $12.18 implies 0.07% downside.
ARHS stock is up 29.68% year-to-date.
3. Dada Nexus Ltd (NASDAQ:DADA)
Number of Hedge Fund Holders In Q3 2024: 9
Dada Nexus Ltd (NASDAQ:DADA) is an on-demand retail and delivery platform.
The stock has surged this year after JD.com offered to acquire it at a significant premium.
On January 27, 2025, JD.com (which already owns 63% of Dada) proposed acquiring all remaining shares at $2.00 per ADS ($0.50 per ordinary share).
Analysts suggest full ownership would let JD better integrate Dada’s logistics into its e-commerce operations.
The financials haven’t been that great here. Q3 2024 revenue showed 7.3% decline and it has seen persistent losses. Q3 2024 losses reached $27 million.
The consensus price target of $2.7 implies 47.54% upside
DADA stock is up 51.24% year-to-date.
2. ThredUp Inc (NASDAQ:TDUP)
Number of Hedge Fund Holders In Q3 2024: 11
ThredUp Inc (NASDAQ:TDUP) is a secondhand apparel resale company.
The stock has delivered solid gains so far in 2025 after its Q4 2024 preliminary results exceeded guidance. Revenue guidance was raised to $66.7 million to $67.2 million. This is up 9% year-over-year and beat prior estimates of $58 million to $60 million.
Gross margin is projected at 80.2% to 80.4% and is up from 70.4% in Q2 2024.
Moreover, adjusted EBITDA margin improved and it has been using AI to drive platform enhancements. Investors are quite optimistic about its Q4 earnings report due March 3, 2025.
The consensus price target of $3.5 implies 41.7% upside.
TDUP stock is up 77.7% year-to-date.
1. Beyond Inc (NYSE:BYON)
Number of Hedge Fund Holders In Q3 2024: 16
Beyond Inc (NYSE:BYON) is an e-commerce company that focuses on home goods and affinity data monetization. The company’s brands include Bed Bath & Beyond, which went bankrupt earlier.
The stock is up so much so far this year as its acquisitions have been driving growth. It acquired Buy Buy Baby in February 2025. It also acquired Zulily in 2024 and finalized a deal with Kirkland’s and gained 40% ownership.
Furthermore, it sold its Utah HQ for debt repayment, which reduced its annualized fixed costs by $65 million. The company saved another $20 million by cutting 20% of its workforce.
Q3 2024 active customers grew 21% to 6 million with gross margins at 21.2% despite a revenue dip.
The consensus price target of $12.29 implies 40.12% upside.
BYON stock is up 77.89% year-to-date.
While we acknowledge the potential of BYON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BYON but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
