6 Retailers Expected to Thrive in the Next 5 Years

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Retail earnings reporting season is underway, and Walmart Inc. (NYSE: WMT), the largest of them all, shared its better-than-expected quarterly results this morning. While no one expects that retail behemoth to go the way of Toys “R” Us anytime soon, media coverage of the retail sector often suggests that brick-and-mortar store operators are gasping their final breaths.

That may be true of some, perhaps Sears and J.C. Penney, but it is clearly not so for many others. Wall Street expects some of them to be around and going strong for at least the next few years. In fact, analysts see the following companies offering up double-digit percentage growth in earnings per share (EPS) over the next five years, despite weaker growth in the past five years for some of them.

Lowe’s Companies Inc. (NYSE: LOW) is expected to have 16.0% EPS growth over the next five years, though that would be a slowdown from the 19.5% EPS growth over the past five years. Lowe’s is also among companies that could soon see a market cap of more than $100 billion. Shares are up more than 5% year to date, and the company is set to post its fiscal second-quarter results on August 22.

Urban Outfitters Inc. (NASDAQ: URBN) EPS are expected to see a 15.5% gain in the next five years, much better than the 1.0% decline in the past five years. The fashion retailer posted record revenue in the first quarter, but investors were wary. Even so, the share price now is more than 27% higher than at the beginning of the year. The earnings release date is August 21.

Dollar General Corp. (NYSE: DG) EPS will show a gain of 15.3% in the next five years, if the analysts are correct, while that growth was just 9.5% in the past five years. The discount retailer saw upgrades from both Citigroup and Raymond James this summer. Its shares are trading more than 10% higher year to date. Watch for the Dollar General report on August 30.

Home Depot Inc.’s (NYSE: HD) EPS will grow 15.1% over the next five years, if the forecast is on target. As with rival Lowe’s, that is a deceleration from growth in the past five years. This big-box home improvement store operator already reported its fiscal second-quarter results, offering up record sales and earnings. The stock is trading around 3% higher year to date.

Dollar Tree Inc. (NASDAQ: DLTR) is expected to have 13.6% EPS growth in the next five years, while over the past five years the EPS growth was 12.5%. This discount retailer is a top pick at RBC, and its shares recently were upgraded by Atlantic Equities. The stock is actually more than 12% lower year to date, yet up more than 9% in the past few weeks. The scheduled earnings report date is August 30.

And Nordstrom Inc. (NYSE: JWN) EPS are expected to grow 12.2% in the next five years, a turnaround from the 4.4% decline in the prior five years. However, recent sales projections for the next five years may tell another story. The share price is more than 5% higher than at the beginning of the year. The company is expected to release its second-quarter results later today.

Note that analysts anticipate less than 6% growth of EPS from Walmart in the next five years. However, at Amazon.com Inc. (NASDAQ: AMZN), the juggernaut that often gets blamed for the supposed death of traditional retail, about 46% EPS growth is projected for that same period.