5 Well-Dressed Retail Stocks for 2010

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Dress Up Your Portfolio With
These Retail Stocks

“Dress for success,” “clothes make the man,” “when you look good you feel good.” We’ve all heard these clichés throughout the years, and while these phrases may be trite, the sympathies behind them still hold true. From teenage girls to distinguished gentlemen and everyone between, nearly everyone takes pride in being well-dressed.

Of course, as investors we all want well-dressed portfolios, too, so why not achieve both of these objectives at the same time?

The following retail stocks can not only make you look good, they can make your portfolio look even better. Now let’s slip into something a little more comfortable and take a closer look at each of these five well-dressed retail stocks for 2010.

Retail Stock #1 -
Abercrombie & Fitch (ANF)

Preppy, sexy and often controversial; it’s what teen retailerAbercrombie & Fitch (ANF) makes its living on. The trendy look of its merchandise, along with a healthy dose of the “cool” factor, makes this store a go-to place for fashion-focused teens.

ANF clothes don’t come cheap when compared to the competition’s, and that’s because the retailer wants its customers to feel like they’re members of the privileged class. So far, this formula has worked well for ANF, even in the midst of a recession. As the economy continues recovering in 2010, look for ANF to add to both its top and bottom lines. And, of course, look for the stock to make a fashion statement as well.

Retail Stock #2 -
Chico's FAS (CHS)

In Spanish, the word “chico” literally means small. But there was nothing small about retailer Chico’s (CHS) most recent quarterly earnings. The revamped and made-over women’s clothing chain put an end to its recent string of declining quarters by posting a sales increase of 13% for the third quarter easily besting consensus Street earnings estimates.

Fashion mavens have noticed that the company now is offering many new and updated fashion choices. This is true not only of Chico’s stores, but also of the company’s White House/Black Market and Soma Intimates chains. Chico’s stellar third-quarter earnings could be a harbinger of things to come, especially if the fashion-conscious 40-something women the company caters to begin regarding the stores as the “in” place to shop.

Retail Stock #3 - Guess? (GES)

Fashion retailer Guess? (GES) left no question about how well it has performed of late. The company just posted better-than-expected third-quarter earnings of 69 cents per share. The Street was expecting earnings to come in at just 50 cents per share. An earnings beat like that is always going to shake up Wall Street’s runways, and that’s exactly what happened to GES shares after posting the big results.

But the real good news for Guess came via its fourth-quarter outlook. The company said it expects revenue of $585 million to $605 million on earnings of 77 cents to 80 cents per share. Those numbers are well above analyst expectations for revenue of $563.8 million, and earnings of 69 cents per share in the all-important holiday quarter. If Guess can keep up this kind of performance in 2010, look for the shares to continue draping the well-dressed investor.

Retail Stock #4 –
Jos. A. Bank Clothiers (JOSB)

Whether you’re a young professional coming up in the world, or just a businessman who appreciates a good sartorial value, Jos. A. Bank Clothiers Inc. (JOSB) is a great place to do your shopping. The men’s apparel, footwear and accessories retailer operates 474 stores in 42 states and the District of Columbia, giving them a presence in nearly every major U.S. business center.

The company has done very well of late, posting a 26% increase in third-quarter profits. This was the 14th consecutive quarter that profits have risen from prior-year levels. Moreover, the all-important same-store sales for stores open at least a year also increased, proving that the company’s business model is performing well. If the company continues delivering solid performance in 2010, JOSB shares are likely to spiff up any well-dressed portfolio.

Retail Stock #5 - Nordstrom (JWN)

Anyone who has ever been to a Nordstrom (JWN) department store knows firsthand that the service this store provides is about as good as it gets. Top-shelf customer attention combined with high-end merchandise equal a fantastic shopping experience. Sure, you’ll pay a little more for the quality and service this store provides, but that hasn’t stopped Nordstrom from shining.

December 3, 2009

By Jim Woods, Contributing Editor, InvestorPlace