4 Weddings and a Funeral

If you've heard the dismal retail sales data for December, you probably aren't surprised to learn that stocks such as Bed Bath and Beyond (Nasdaq: BBBY  ) , Macy's (NYSE: M  ) , and Williams-Sonoma (NYSE: WSM  ) are at or near 52-week lows. However, think twice before you send these stocks to their tomb. They all have one thing in common: love!

For love or money
Yes, even if we are heading toward a recession, people will still fall in love and get married. With the average American wedding cost reaching $28,000, the tough economic climate apparently hasn't stifled the booming wedding industry. Just think of how much better off these young couples would be if they put that money toward a down payment for their first home, instead ... but I digress.

People are spending more on their weddings, and the spending trickles down to beneficiaries throughout the economy, including retailers with ever-popular wedding registries. While folks seem to be holding off on buying the newest Pottery Barn duvet cover for themselves, they'll still splurge on those great wine glasses for cousin Lucy's wedding gift. After all, you've got to have the perfect gift to impress the happy couple.

Or do you? Followers of industry darling The Knot (Nasdaq: KNOT  ) may beg to differ. The Knot has dropped more than 58% from its 52-week high, as it works through its integration of the Wedding Channel and a steep increase in advertising rates. With no net debt (even after the Wedding Channel acquisition) and a strong profit margin of almost 25%, The Knot has retained strong financials even in this challenging market, making for an interesting play in this crushed retail market.

Bed Bath and Beyond may not provide The Knot's brand of direct wedding-industry play, but it's still worth your consideration. With a drop of 38% from its 52-week high, and a downright cheap P/E of 12.31, Bed Bath is one of the leading gift registry sites for brides. Consistent earnings growth, combined with strong margins and no debt, make Bed Bath and Beyond a Motley Fool Stock Advisor and Inside Value Pick.

Williams-Sonoma is a tougher sell. Its P/E matches that of Bed Bath and Beyond, but the company continues to struggle with anemic revenue growth and a negative year-over-year earnings per share rate. Meanwhile, Macy's has signed a deal to be The Knot's exclusive retail product bridal registry provider, but it has double-digit negative EPS "growth."

Going to the chapel
Beyond the current cheap prices and good financials for companies such as The Knot and Bed Bath and Beyond, there is reason to believe that the wedding industry will continue to grow. The sheer size of Generation Y (76 million Americans aged 13-29 years) allows it to tower over its older Generation X brothers and sisters. Many of these "kids" haven't taken the marriage plunge, promising organic growth for the wedding industry and the gift retailers. Better yet, this group has a penchant for bling, and it certainly won't hold back when planning weddings.

Till death do us part
Retail stocks have certainly taken a hit lately, but that doesn't mean that select stocks lack potential. Down-and-out Americans will keep getting married and buying gifts for their betrothed friends, making stocks with double-digit growth and reasonable P/Es such as Bed Bath and Beyond and The Knot look more promising than the rest of the pack.

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