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2 Retail Stocks for Your Holiday List

We think L Brands and TJX look attractive ahead of the crucial holiday sales weekend.

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Bridget Weishaar: Holiday sales are an incredibly important time for retailers, accounting for about 20% of total sales. The period between Black Friday and Cyber Monday is key. In an NRF survey, it was estimated that 69% of Americans plan to shop during the Thanksgiving weekend.

But behaviors are definitely shifting, and we see a couple trends.  First, spend is shifting away from brick and mortar and to online. According to NRF data more Americans shopped online than visited stores Thanksgiving weekend last year. Second, deals are starting earlier. Wal-Mart and Amazon have already started offering holiday discounts. NRF data shows that more than 40% of Americans already started their holiday shopping by Nov. 1. Third, on the upside, inventory levels look much better controlled across apparel retailers this year, and weather thus far has been cold. Low inventory allows companies to chase what trends are working and control promotional levels better.

Bridget Weishaar does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.