It's barely October, so why are you reading about the holiday shopping season when no one else is writing about it? That's your answer right there. Like most worthy bargains, the time to act is now -- not when they've been picked bare come December.
Really. By late November the holiday shopping season will have already dictated the winners and losers -- both in terms of gifts and the retailers that sell them -- and everyone will already either be all over them or marked them down into the clearance bin.
So, my apologies if I'm unfashionably early, but I'd rather go out on a limb now while there is still a good chance of earning holiday cheer -- or winding up with eggnog on my face.
The consumer electronics sector has been hit or miss over the past few years. It's easy to see why. With the economy in a lull, the last thing folks are thinking about is setting up a home theater system or upgrading their computers. But that kind of pent-up demand can translate into good days for Best Buy (NYSE: BBY ) and Circuit City (NYSE: CC ) this holiday season.
With video-game console prices falling and wide-screen televisions inviting, this could be the big-ticket Christmas that retailers have been waiting for.
Best Buy may already be on track. Last month the company revised earlier profit forecasts significantly higher. It is now looking to earn at least $2.35 a share this fiscal year, well above its initial projection of $1.91 a share. It also posted strong same-store sales gains of 7.5% for the August quarter. Circuit City hasn't fared as well, posting a loss on negative comps so far this year. However, an $8-a-share buyout offer that was rebuffed by the company may give the stock some downside protection.
Rebellion gaining mass appeal
Hate Britney and Aguilera? Love alternative rock? Fans of Hot Topic (Nasdaq: HOTT ) may not like it, but the anti-establishment theme is being eaten up by the boy band-averse masses. In other words, contradictory as it might seem, the defiant world of anarchic rock and retro goods is flowing in the veins of the mainstream. The company's 12% comp gains during the critical back-to-school month of August, along with its aggressive expansion, almost assures that Hot Topic will be a hot topic over the holidays.
Not as cutting-edge but staging an interesting revival in specialty retail is Guess? (NYSE: GES ) . Earlier this week the company reported a 13.5% surge in comparable-store sales last month, capping off a healthy 13.2% gain in comps for the September quarter. While the apparel specialist still has room for improvement in its operations, its recent consumer popularity makes it a forgotten player worth remembering.
World wide want
The convenience of online shopping can no longer be ignored. Even as offline stores turned in a lackluster holiday shopping season last year, the dot-com space coasted to achieve cozy double-digit percentage gains.
Two of the 2002 standouts are seemingly well positioned for a repeat performance in 2003. Amazon.com (Nasdaq: AMZN ) , whose shares have flourished since being featured in Motley Fool Stock Advisor, has only added to its growing storefronts. And Hidden Gems hopeful Overstock.com (Nasdaq: OSTK ) has already seen its sales more than double this year.
While Santa's not usually the type to send his PayPal-enabled elves off to eBay (Nasdaq: EBAY ) to fill up his sleigh, let's not forget the leading trading site's holiday significance. The site serves as seasonal bookends. Early on, it's a popular way for folks to raise the needed spending money to go mall shopping. Later on, unwanted gifts or items that new presents have displaced wind up on the eBay auction floor.
Don't let the economic turnaround lull you into believing that folks are just going to give up on the thrift havens. Yes, the pent-up demand should be good for a healthy uptick in big-ticket sales, but let's not assume that everyone is going to shed their discounting skin.
Tuesday Morning (Nasdaq: TUES ) , with its eclectic operating schedule, is a class act. While the stock has doubled over the past year, the shares are still fetching a forward earnings multiple in the high teens. That's not too shabby for a company that is looking to grow earnings by at least 20% this year -- and the next. More mainstream closeout and dollar-store chains such as Big Lots (NYSE: BLI ) and 99 Cents Only (NYSE: NDN ) should still produce healthy results moving out clearance merchandise and bargain trinkets.
Is that 10 stocks already? I guess so. The stuffed stocking runneth over, my friend. But this discussion doesn't end here. Crowds are weeks away from voting for the winners with their purchases. Let's hope the market remembers to hang mistletoe over the stock certificates this year.
Rick Aristotle Munarriz loves the holidays. You can't blame him for getting an early jump, can you? He doesn't own a stake in any of the companies mentioned in this article. Rick's other stock holdings can be viewed online, as can the Fool's disclosure policy.