NEW YORK (TheStreet) -- If you think Christmas sales are starting earlier every year, it's not just your imagination. The reality is that a persistently weak consumer spending environment has weighed on many retailers across 2010. Their last hope is for one big push to the finish line that coincides with the holiday shopping season.
Coach ( COH): If you think that Americans are going to give up on fashion and appearances, you've got another thing coming. That means "cheap chic" brands like Coach could be the big winners this holiday season; its goods like leather handbags and accessories are upscale but still within reach. COH stock is up 46% since Sept. 1, and the average Wall Street forecast projects earnings growth of 20% in the current quarter over the year-earlier period. DSW ( DSW): Shares of small-cap shoe retailer DSW have soared about 58% since Sept. 1, thanks to strong earnings and a strong outlook. DSW has only about 300 stores, but has been able to see big growth in 2010 thanks to supply agreements with shoe departments at various other retailers such as Stein Mart ( SMRT). This is a perfect scenario for a favorable holiday shopping season since DSW can capitalize on the scale of its partners but not worry about the risks of managing staffing, inventory and overhead. Fossil ( FOSL): There is a lot to like about this fashion accessories maker. Its third-quarter profit soared 93% on surging sales and margins, JP Morgan raised its price target and BB&T Capital Markets initiated coverage with a buy recently. A $750 million stock-buyback plan announced at the end of August has sparked a three-month run of about 50%. Chances are the company will continue to impress after raising guidance in each of its last two earnings calls. Hasbro ( HAS): Hasbro will see an uptick in share price if it can put together stronger holiday toy sales. But the real potential for HAS stock is in 2011. Hasbro will partner with Reebok on an apparel and footwear line next year based on its wildly popular Nerf line, and is gearing up for a July release date of Transformers 3 that should fuel the toy line of the same name. Shares have briefly rolled back from a new 52-week high set at the beginning of November, so now may be your best chance to get into HAS before the holiday rush. Limited Brands ( LTD): This clothing retailer is gearing up for what should be an impressive earnings report on Wednesday., Nov. 17. After Limited saw same-store sales increase 9% for October, it raised its guidance and should make a splash just before Thanksgiving break. If the market sees some seasonal strength and favorable holiday sales, the stock's performance should carry into 2011.
Nordstrom ( JWN): In October, Nordstrom's same-store sales gained 3.4%, handily topping forecasts. That beat Macy's ( M), which saw 2.5% year-over-year growth, and JC Penney ( JCP), which had a 1.9% gain in October. October was Nordstrom's 14th consecutive month of traffic growth, an inspiring sign as we enter the peak period for mall shopping. Polo Ralph Lauren ( RL): Polo stock is up 44% since Sept. 1 and the company posted strong fiscal second-quarter earnings. Wall Street had expected profits to shrink, but Polo earnings grew 26% year over year. That's the fourth time running Ralph Lauren has topped forecasts and shows this clothing company is much better off than many think. That's probably because in addition to its premium line it has a Polo-lite line that is sold everywhere from outlet malls to Costco ( COST). Yes, Costco. Shutterfly ( SFLY): Christmas cards are big business for Shutterfly, as are holiday gifts such as family photo calendars, coffee mugs or mouse pads featuring the grandkids' smiling faces. For the last three years, almost exactly half of the company's revenue came in the fourth quarter. Shutterfly's revenue has been steadily on the rise, from $187 million in fiscal 2007 to $213 million in 2008 to $246 million last year. Another strong holiday season is in the works and investors could ride this trend to more gains on top of the 70% gain SFLY stock has tallied in 2010 to date. Winmark ( WINA): If you're looking for a retail play for tight consumer spending, look no further than Winmark. The company is the brains behind stores like Play It Again Sports, Platos Closet and Once Upon a Child -- retailers that sell new, used and consigned goods. Not only are pre-owned golf clubs or strollers great buys for the consumers, they are massively profitable with margins that are through the roof. The company's third-quarter profit was up more than 51% -- coincidentally almost the same amount of profits you'd be sitting on if you bought Winmark at the beginning of 2010. As of this writing, Reeves did not own a position in any of the stocks named here.