Back-to-school and college is one of the busiest shopping seasons (mid-July to mid-September) in the United States. As of early July, more than half (55%) of back-to-school and college shoppers have already started buying items for the upcoming school year, according to NRF. While shopping has begun in full swing, the majority (86%) of consumers are yet to finish the rest of their purchases.
Total back-to-school spending is expected to reach $38.8 billion, the second-highest figure on record, after last year’s high of $41.5 billion, per NRF. Total back-to-college spending is expected to touch $86.6 billion, the second-highest figure in history.
Where Will Shopping Spent Go?
Like the past years, the most popular destinations for back-to-school shopping are online (57%), department stores (50%), discount stores (47%), clothing stores (42%) and electronics stores (23%). K-12 shoppers have a budget of $309.35 on average for electronics ($13.7 billion total), $253.29 for clothing and accessories ($11.2 billion total), $141.62 for school supplies ($6.3 billion total) and $170.43 for shoes ($7.6 billion total).
The top five categories for college spending include $359.49 on average for electronics ($22.8 billion total), $192.40 for dorm or apartment furnishings ($12.2 billion total), $171.06 on clothing and accessories ($10.9 billion total), $149.71 on food ($9.5 billion total) and $112.60 on shoes ($7.1 billion total).
Stocks to Play
Burlington Stores BURL
This discount apparel retailer operates in the United States and Puerto Rico. The Zacks Rank #2 (Buy) stock has an upbeat VGM Score of A. The stock hails from the Retail - Discount Stores industry, which has an upbeat Zacks Rank (top 24% of more than 251 Zacks industries).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale COST
Costco Wholesale Corporation sells high volumes of food and general merchandise (including household products and appliances) at discounted prices through membership warehouses. The Zacks Rank #2 stock comes from the Retail - Discount Stores industry. The stock has a good VGM Score of B.
Ambarella AMBA
Ambarella Inc. develops video compression and image processing semiconductors, which enable high-definition or HD video capture, share and display. The Zacks Rank #2 company hails from the Electronics – Semiconductors industry, which has an upbeat Zacks Rank (top 39% of more than 251 Zacks industries).
Lowe's Companies LOW
Zacks Rank #3 (Hold) Lowe’s has evolved as one of the world’s leading home improvement retailers, offering services to homeowners, renters and commercial business customers. Lowe’s has all the essentials for going back to campus and making one feel at home. The stock has an upbeat VGM Score of A.
ETFs to Buy
ProShares Online Retail ETF ONLN
Online shopping is one of the most-favored forms of shopping now. The underlying ProShares Online Retail Index is a specialized retail index that tracks retailers principally selling online or through other non-store channels. The fund charges 58 bps in fees and yields 0.22% annually.
SPDR S&P Retail ETF XRT
The ETF XRT has solid exposure to the apparel segment, the sales of which are likely to gain in the coming days. The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The fund charges 35 bps in fees and yields 1.32% annually.
Invesco Food & Beverage ETF PBJ
As collegegoers are likely to spend on food, this ETF has a chance of going up. The underlying Dynamic Food & Beverage Intellidex Index comprises stocks of 30 U.S. food and beverage companies. These are companies principally engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies.
VanEck Semiconductor ETF SMH
As electronics sales are likely to be on a roll on occasions like this, one should note that the backbone behind electronics, i.e., semiconductors’ demand, is expected to be up. The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees and yields 0.43% annually.
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See Stocks Now >>Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report
Costco Wholesale Corporation (COST) : Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
VanEck Semiconductor ETF (SMH): ETF Research Reports
Ambarella, Inc. (AMBA) : Free Stock Analysis Report
Burlington Stores, Inc. (BURL) : Free Stock Analysis Report
Invesco Food & Beverage ETF (PBJ): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
