To celebrate the holidays, we here at the Fool are devoting extra virtual ink to all things consumer-focused in a special section called "The 12 Days of Christmas." Over the coming week, we'll have our "12 Days of Content" surrounding consumer-focused names that look set to profit or perish from the holiday cheer.
You can't "ho, ho, ho" without the reindeer that make Santa's sleigh go, go, go.
Of course, you know the truth about Santa. All of us "Santas" are out in the malls taking part in the maddening rush for toy hamsters. But there's no harm in playing some reindeer games. I figured I'd take the eight legendary reindeer, tack on Rudolph for good storybook measure, and cast retailers as Santa's antlered delivery force.
Amazon.com
Amazon earns its speedy reindeer moniker two ways. The first, of course, is that Amazon has established itself as the reliable brand in e-tail. A recent Zeta Interactive study finds that an overwhelming 88% of the Amazon.com mentions in cyberspace are positive posts. The retailer's Prime membership program -- for which frequent shoppers pay $79 a year for "free" two-day shipping on all Amazon-stocked wares -- is simply target practice to make sure it consistently delivers on time.
The other reason for claiming the Dasher nameplate is the company's speedy growth. As big as Amazon may be -- and in the thick of a global recession, no less -- Amazon.com continues to stun skeptics with its gains on the top and bottom lines.
Net sales climbed by 28% in its latest quarter. Margins exploded, enough to give the company a 68% profitability pop. Now that's fast.
Abercrombie & Fitch
Shoppers are avoiding Abercrombie & Fitch these days. Comps fell by a whopping 17% last month, even though sales at its consumer-direct business inched higher.
This isn't the kind of trend an investor likes to see heading into the telltale holiday season, but it's hard to give the Dancer crown to anyone other than A&F, with its scantily dressed catalog models cavorting about.
lululemon athletica
As a rapidly growing chain of high-end fitness apparel, lululemon suits up yoga enthusiasts and other well-to-do shoppers who enjoy prancing around in cozy workout gear.
Revenue soared by 30% in its latest quarter, fueled by concept expansion and a 10% spike in comps on a constant-dollar basis. Earnings grew at a staggering 60% clip, so obviously, lululemon wasn't marking down its fancy fitness duds to move product.
Limited Brands
It's hard to get sexier than Limited Brands, the company behind the 1,638 Bath & Body Works and 1,043 Victoria's Secret stores.
Selling bathing supplies and lingerie was a tough gig during the recession, but Limited is starting to bounce back. Bath & Body Works and Victoria's Secret posted positive comps of 4% and 3%, respectively, last month.
The year certainly didn't start out positive for Limited. Comps through the first 43 weeks of the fiscal year are off by 5%, but Limited Brands' same-store sales had fallen by 8% year-to-date at this point a year ago.
Hot Topic
When I think of comets, I envision rare flashes of brilliance between interminably long periods of darkness. Step up, Hot Topic. The fringe goth and emo kids found mainstream success with the Twilight series, and suddenly, everyone wanted to don dark clothing and be a vampire.
The comet crashed, of course. Hot Topic's bright streak of breakthrough comps turned negative again earlier this year -- but that probably pleased the doomsayer emo kids.
Blue Nile
When you specialize in selling diamond engagement rings online, you were born to play Cupid.
As you can imagine, recessions are tough for high-end jewelers. Discretionary income is hard to come by, and realistic couples simply push off plans to tie the knot. However, that's perhaps the best reason to pay attention to Blue Nile for the inevitable pop in popping-the-question sessions.
Unfortunately, you may be too late to be fashionably early. The stock has already more than tripled off its January lows.
Zappos and Limited Too: Donner and Blitzen
As the thunder-and-lightning duo of Santa's team, I figured I'd go for two climate-rattling retailers that both drew enough attention to get acquired this year.
Limited Too offered a stranglehold on the tween girls' clothing market, a niche that Dress Barn sought out in its quest to reach a younger demographic. Zappos is the online shoe seller with a cult following so impressive that Amazon.com had to buy it.
Wal-Mart Stores
This one was easy. Sure, Wal-Mart has its critics, but the world's largest retailer is the all-weather bright spot -- get it? -- that leads the sleigh.
Wal-Mart has held tough during the recession, as shoppers turn to the discounter for bargains on wares and a growing slate of groceries. It's also the best bellwether for the retail industry.
Wal-Mart, you'll go down in history.
Care to recast any of my choices? Have at it in the comment box below.
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