NEW YORK ( TheStreet) -- Shares of several retail stocks hit 52-week highs as a rebounding economy and job market coincided with improving earnings. The following retail stocks hit 52-week highs on Thursday: TJX ( TJX), Lululemon ( LULU), Macy's ( M), Dillards ( DDS), Under Armour ( UA), Express ( EXPR), Target ( TGT), Hot Topic ( HOTT), Foot Locker ( FL). ITG analyst Linda Tsai said she thinks retailers such as the ones that hit a 52-week high Thursday have been working on cutting costs, which is catching the attention of investors. She noted that for some retailers, the cost of goods in the second half of 2012 will be lower than it was the previous year.
TJX The discounted retailer bought two of Fidelity Investments' buildings in Marlborough, Mass., on Wednesday, according to the Boston Globe. "Over the past five years, TJX improved gross margin (GM) by 290bps, and impressively managed to mitigate cost pressures in 2011 as merchandise margin (MM) was up yr/yr (up 10bps in Q4 which incurred cost pressures and aggressive promo activity)," Wells Fargo analysts wrote in a Feb. 23 report. "TJX continues to expect GM improvement in 2012 with the majority driven by MM improvement. We model GM up 50bps for 2012." Shares of TJX hit a 52-week high Thursday of $37.69. The stock's 52-week low of $24.13 was set on March 18. TJX has an estimated price-to-earnings ratio for next year of 14.62 times; the average for apparel retailers is 16.29. For comparison, Limited Brands ( LTD) and The Gap ( GPS) both have lower forward P/Es of 14.54 and 12.24, respectively. Twenty-one of the 31 analysts who cover TJX rated it buy; 10 analysts gave the stock a hold rating. TheStreet Ratings gives TJX an A+ grade with a buy rating and $48.68 price target. The stock closed Thursday at $37.74 and has risen 16.85% year to date.
Macy's The retailer's price target at Credit Suisse was raised to $43 from $36 on Thursday. "The 'winners are really winning' theme continues to permeate retail, and Macy's has been one of the clearest examples," Credit Suisse analysts wrote in a report Thursday. "Beginning in '10, M started gaining share in the department store space, and in the past six months, the gains have only accelerated. Macy's impressive top line performance is partially a result of weakness at its competitors." Shares of Macy's hit a 52-week high Thursday of $39.15. The stock's 52-week low of $22.50 was set on March 23. Macy's has a forward P/E of 10.39; the average for broad-line retailers is 27.62. For comparison, J.C. Penney ( JCP) and Target ( TGT) both have higher forward P/Es of 13.08 and 11.89, respectively. Fifteen of the 19 analysts who cover Macy's rated it buy; four analysts gave the stock a hold rating. TheStreet Ratings gives Macy's an A+ grade with a buy rating and $50.57 price target. The stock closed Thursday at $39.30 and has risen 22.13% year to date.
Under Armour "The Company seems to be taking a more disciplined approach to inventory via a combination of SKU rationalization (20% reduction of total assortment expected in FY12), supply chain improvements and perhaps a more conservative approach to orders," KeyBanc Capital Markets analysts wrote in a Jan. 27 report. "We believe that this should help drive continued improvement in inventory levels during 2012." Shares of Under Armour hit a 52-week high of $93.36 on Thursday. The stock's 52-week low of $52.62 was set on Aug. 19. Under Armour has a forward P/E of 31.06; the average for clothing and accessories companies is 13.98. For comparison, Columbia Sportswear ( COLM) has a lower forward P/E of 13.69. Fourteen of the 27 analysts who cover Under Armour rated it hold. Eleven analysts gave the stock a buy rating and two rated it sell. TheStreet Ratings gives Under Armour a B grade with a buy rating and $120.91 price target. The stock closed Thursday at $92.85 has risen 29.34% year to date.
Target The discount retailer announced Thursday that 100 of its stores have been remodeled to offer groceries. "Management was confident in the company's ability to meet or exceed its 2017 goal of $8 in EPS," Piper Jaffray analysts wrote in a March 2 report. "By 2017, the company expects to double sales per share from
Foot Locker The athletic shoe retailer anticipates its annual sales to rise 33% to $7.5 billion by 2016, according to Bloomberg. "Based on the positive changes occurring within FL, most importantly the empowered team atmosphere that continues to evolve, and , what we believe will be the achievement of most all but the sales part of the revised plan by 2015 at the latest, we are raising our PT from $30 to $36," Sterne Agee analysts wrote in a report Wednesday. "We contend that potential effectiveness of new allocation systems, and measured investments into the core businesses will drive upside to EPS and revenue in the coming years." Shares of Foot Locker hit a 52-week high Thursday of $30.17. The stock's 52-week low of $16.66 was set on Aug. 8. Foot Locker has a forward P/E of 12.19; the average for apparel retailers is 16.75. For comparison, Finish Line ( FINL) has a higher forward P/E of 13.25. Nine of the 15 analysts who cover Foot Locker rated it buy; six analysts gave the stock a hold rating. TheStreet Ratings gives Foot Locker an A+ grade with a buy rating and $37.97 price target. The stock closed Thursday at $30.12 and has risen 26.34% year to date.