CNBC’s Jim Cramer on Wednesday offered a list of off-price retail stocks investors should keep on their radar.
“There’s an overabundance of inventory in the brick-and-mortar retailers, and the big chains are desperate to get rid of that stuff so they can get new products in,” the “Mad Money” host said. “The off-price chains are buyers of last resort.”
Here̵[ads1]7;s his list of companies investors should watch:
- Burlington stores
- Ross Stores
- Ollie’s Bargain Outlet
Retail giants have reported earnings this week, with some doing better than others.
Walmart beat revenue and earnings in its second-quarter results reported Tuesday. But the company repeated its profit warning from last month, and CEO Doug McMillon warned in an interview Tuesday on “Squawk on the Street” that even wealthy consumers are becoming more frugal because of inflation.
Target reported a bigger-than-expected loss on earnings in its latest quarter on Wednesday and saw earnings fall nearly 90% from the same period a year earlier. The company had warned in June that plans to shed excess inventory would be a headwind to its bottom line.
Cramer said Target’s dismal results reflect consumers’ shift in appetite for experiences rather than goods, stemming largely from a desire to go out after staying indoors during the height of the pandemic.
While this shift in consumer spending means there’s a window to buy retailers on the cheap, investors should understand that these stocks are long-term opportunities, he added.
“That doesn’t mean they’re doing so well right now,” he said.