6 High-Growth Retail Stocks With Strong Inventory Trends

|
Includes: BEBE, CROX, MED, SHW, VRA, ZUMZ
by: Kapitall

Do you consider a company's sales trends when comparing stocks? For industries such as retail, sales trends are a big indicator of future success. With this idea in mind, we ran a screen.

We began by screening the retail industry for stocks with high growth projections, with 5-year projected EPS growth rates above 15%.

We then screened for strong sales trends by comparing their growth in revenue to growth in inventory over the last year. We screened for stocks with positive sales trends, with faster growth in revenue than inventory over the last year. Since inventory represents the portion of goods not yet sold, faster growth in revenue than inventory is considered an encouraging sign.

To screen for strengthening liquidity, we also only focused on those companies with inventory decreasing as a percent of current assets.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall.

Do you think these companies are poised for greater profitability ahead? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Zumiez, Inc. (NASDAQ:ZUMZ): A mall-based specialty retailer providing sports-related apparel, footwear, equipment, and accessories. Market cap at $1.18B, most recent closing price at $37.61. 5-year projected EPS growth at 20.67%. Revenue grew by 22.72% during the most recent quarter ($129.9M vs. $105.85M y/y). Inventory grew by 11.54% during the same time period ($70.44M vs. $63.15M y/y). Inventory, as a percentage of current assets, decreased from 29.55% to 26.7% during the most recent quarter (comparing 13 weeks ending 2012-04-28 to 13 weeks ending 2011-04-30).

2. Crocs, Inc. (NASDAQ:CROX): And its subsidiaries engage in the design, development, manufacture, marketing, and distribution of footwear, apparel, and accessories for men, women, and children. Market cap at $1.48B, most recent closing price at $16.43. 5-year projected EPS growth at 17.50%. Revenue grew by 19.89% during the most recent quarter ($271.8M vs. $226.71M y/y). Inventory grew by 9.9% during the same time period ($169.07M vs. $153.84M y/y). Inventory, as a percentage of current assets, decreased from 34.67% to 27.94% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. Medifast Inc. (NYSE:MED): Engages in the production, distribution, and sale of weight management and disease management products, and other consumable health and diet products in the United States. Market cap at $280.94M, most recent closing price at $18.09. 5-year projected EPS growth at 17.50%. Revenue grew by 19.68% during the most recent quarter ($88.92M vs. $74.3M y/y). Inventory grew by -3.28% during the same time period ($15.35M vs. $15.87M y/y). Inventory, as a percentage of current assets, decreased from 22.45% to 20.26% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

4. Vera Bradley, Inc. (NASDAQ:VRA): Engages in the design, production, marketing, and retail of functional accessories for women under the Vera Bradley brand. Market cap at $924.49M, most recent closing price at $22.81. 5-year projected EPS growth at 19.88%. Revenue grew by 15.59% during the most recent quarter ($117.2M vs. $101.39M y/y). Inventory grew by -3.61% during the same time period ($98.23M vs. $101.91M y/y). Inventory, as a percentage of current assets, decreased from 64.63% to 62.56% during the most recent quarter (comparing 13 weeks ending 2012-04-28 to 13 weeks ending 2011-04-30).

5. The Sherwin-Williams Company (NYSE:SHW): Engages in the development, manufacture, distribution, and sale of paints, coatings, and related products primarily in North and South America, the Caribbean region, Europe, and Asia. Market cap at $13.57B, most recent closing price at $131.42. 5-year projected EPS growth at 16.33%. Revenue grew by 15.13% during the most recent quarter ($2,136.34M vs. $1,855.59M y/y). Inventory grew by -4.41% during the same time period ($1,017.2M vs. $1,064.1M y/y). Inventory, as a percentage of current assets, decreased from 43.14% to 41.06% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

6. Bebe Stores, Inc. (NASDAQ:BEBE): Engages in the design, development, and production of women's apparel and accessories. Market cap at $514.47M, most recent closing price at $6.10. 5-year projected EPS growth at 30.50%. Revenue grew by 10.54% during the most recent quarter ($121.03M vs. $109.49M y/y). Inventory grew by 0.53% during the same time period ($34.23M vs. $34.05M y/y). Inventory, as a percentage of current assets, decreased from 14.22% to 13.62% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-04-02).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.