This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Hiding Behind Luxury: 5 Safe Retail Stocks

NEW YORK ( TheStreet) -- Safety in retail stocks is a bit of an oxymoron.

The sector has been wrought with fear, as sales fell in May for the first time in 11 months, and the companies face rising sourcing costs and shaky consumer sentiment.

But relatively speaking, the best place to ride out this summer's inflationary pressures is in luxury, according to analysts.

Goldman Sachs' U.S. luxury department store same-store sales index increased 13.2% in May, a significant acceleration for March/April trends of 7% to 8% and February's 11.8% increase.

"The acceleration is likely a function of higher input costs being passed on to the customer, with little to no corresponding offset in units," Goldman analyst Andrianne Shapira wrote in a recent research note. "This is in stark contrast to the mid-tier, which is seeing units decline as average unit retail rises."

Luxury valuations are also at a historical premium, trading 20% above long-term averages, as the market drives a wedge between the high and low end.

"Our analysis suggests that the higher income customer is better suited to absorb inflation across apparel, food and fuel, and the luxury premium is reflective of this," Shapira wrote.

Read on for a look at the luxury stocks best positioned for the summer's headwinds.

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SKS $0.00 0.00%
COH $42.65 0.00%
JWN $78.16 0.00%
RL $136.47 0.00%
TIF $87.12 0.00%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs