Retail was one of the more badly hit sectors when the COVID-19 pandemic began. Early last year, companies with numerous brick-and-mortar stores had to shut them temporarily as governments around the world imposed lockdowns and movement restrictions to curb the spread of the coronavirus. Even when restrictions were eased as the situation improved, foot traffic remained low due to social distancing guidelines, while many people also avoided heading to stores in favor of ordering their supplies online.

Retail stocks took a big hit as many retailers scrambled to shift orders onto online platforms to make up for the plunge in physical retail sales. However, a select group of retail businesses have not only remained resilient throughout the crisis, but have also thrived as they catered to new habits and pivoted to online methods of selling.

Here are three retail stocks that have reported strong earnings and whose stock prices could be poised for a bull run.

Man with mask standing in hardware store

Image source: Getty Images.

Lowe's

The hardware and home improvement market has remained resilient during this crisis as more people turned their attention to the care of their homes and farms. Lowe's (NYSE:LOW) is one of the beneficiaries of this trend, with 1,974 home improvement stores located across the U.S. and Canada as of the end of January. The company reported a strong set of fourth-quarter and full-year earnings for the quarter ended Jan. 29, 2021. For the quarter, revenue rose 26.7% year over year to $20.3 billion, with comparable store sales jumping 28.1%.

Lowe's full-year 2021 report card was equally impressive, with revenue increasing 24.2% year over year to $89.6 billion and net income jumping 36.3% year over year to $5.8 billion. Income-seeking investors should also rejoice as the company bumped up its quarterly dividend to $0.60 per share. The company has increased its quarterly dividend every year since 2009. Free cash flow for fiscal 2021 also more than tripled from $2.8 billion to $9.2 billion. 

CEO Marvin Ellison believes that Lowe's will continue to gain market share with its new "Total Home" strategy that seeks to provide customers with everything they need for their homes. Timely launch events helped provide suggestions to customers, like storage solutions for their homes, and the company provided installation services to assist customers. The company has done so well that it intends to hire another 50,000 employees, in addition to paying out a total of seven rounds of bonuses. With the success of its Total Home strategy and the healthy sales momentum, Lowe's looks poised to continue to do well.

Tractor Supply

Tractor Supply (NASDAQ:TSCO) is the largest rural lifestyle retailer in the U.S. and supplies a wide range of products for home care, pets, and land. At the end of December 2020, the company operated a total of 1,923 Tractor Supply stores in 49 states, with plans to increase this to 2,500 over time.

The company reported a strong set of earnings for its fiscal year 2020. Sales grew 27.2% year over year to $10.6 billion, a new record, while comparable-store sales accelerated to 23.1%, far surpassing the 2.7% reported in 2019. The good performance was accompanied by a 10.9% increase in traffic and a rise of 12.2% in average ticket size. Net income surged by 33.2% year over year to $749 million. In line with the rise in net income, management also increased the company's quarterly dividend by 30% year over year to $0.52 per quarter. 

Tractor Supply's "Life Out Here" motto promotes a lifestyle and way of life, allowing it to connect and engage successfully with its customer base. The company's Neighbor's Club membership has hit 19 million at end-2020, and it believes that there is still a significant addressable market opportunity of up to $110 billion of which it only has around a 10% market share. 

Home Depot

Another strong player in the hardware and home improvement segment is Home Depot (NYSE:HD). The $300 billion company saw sales for its fiscal 2021 ended Jan. 31, 2021 rise 20% year over year to $132.1 billion. Operating income increased by 15.4% year over year while net earnings climbed by 14.4% year over year to $12.9 billion. In line with the good performance, the quarterly dividend was increased by 10% to $1.65, continuing a run of 12 consecutive annual dividend increases since 2009.

CFO Richard McPhail remarked that Home Depot could report flat to slightly positive comparable sales growth for 2021 if the demand trends for the second half of 2020 spill over into this year. However, due to the uncertainty over how the pandemic situation may evolve, the company is not offering any financial guidance for this fiscal year.

Still, investors have reasons to rejoice. Home Depot completed its acquisition of HD Supply Holdings, a national distributor of maintenance, repair, and operations (MRO) products, for $8 billion in December 2020. This purchase should boost the company's existing MRO business and allow it to serve existing and new customers better with a wider lineup of products. In addition, Home Depot is also launching a new suite of environmentally friendly cordless outdoor power equipment products to provide customers with more choices. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.