These retail names are on our Best Stocks list as the holiday season begins
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Happy Thanksgiving, how bout them Cowboys? If I had a nickel for every time I was told about the trials and tribulations of the U.S. consumer, well, I’d be wealthier than an Ellison. “The consumer is struggling, the consumer is tapped out, the consumer is on its last legs, the consumer is running on fumes, the consumer this and the consumer that.” Lamenting the state of the consumer is almost a daily refrain in the media these days, stemming from a very basic misconception I can clear up right now: There is no such thing as “the consumer.” Perhaps there used to be a protypical, stereotypical, homogenized hypostatization of “the consumer” that made sense in the 1970’s when everyone worked down at the mill — but that world no longer exists. MacKenzie Scott (formerly MacKenzie Bezos) is the head of a U.S. household. Over the last five years, she’s personally given away over $19 billion to more than 2,000 charities making her, perhaps, one of the most wonderful human beings who has ever lived. She’s also a mother of four in Washington state and, by extension, a consumer. Are we talking about her and the guy who shovels out the petting zoo after a children’s birthday party in the same breath? If so, why? Are the spending decisions being made by Ms. Scott and the drivers thereof in any way, shape or form, relevant to those being made by households led by teachers, accountants, street magicians, nurse practitioners or cardboard box factory foremen? A less extreme juxtapository example than Scott and the shovel man – does an AI consultant working at Accenture and living in the Beacon Hill neighborhood of Boston experience the 2025 economy in the same way that the owner of a regional chain of auto collision shops in Phoenix, Arizona does? Same income, perhaps, radically different decision-making inputs and wealth effect stressors. AI Guy’s behavior is going to be significantly more impacted by the cost of local real estate and the most recent price of his stock options. Collision Guy’s going to be keying off the cost of local labor to staff his garages as well as the prices and availability of auto parts and tools. Let’s say they both take home $500,000 a year. Same spending patterns? Not a chance. In this country, we have tiers of consumers who have entirely different priorities and sources of stress and/or economic stimuli driving their behavior. Last year, it became obvious that households at the top of the income and wealth distribution were actually benefiting from higher interest rates that were meant to be restrictive thanks to savings accounts and money market funds that were positively gushing with cash. Higher rates actually fueled the consumption of the top 20% of households while negatively impacting those with credit card balances and the need to borrow. So are higher rates good or bad for “the consumer”? Horse hockey. Then there are regional differences. Imagine a plunging natural gas price picture pummeling specific local economies in Oklahoma and Texas vis-à-vis employment trends and wages whilst simultaneously benefiting lower income people paying their home heating bills in Chicago and Little Rock. You tell me, is cheaper natural gas good or bad for “the consumer”? Obviously, the whole conversation devolves into ridiculous nonsense. It is neither good nor bad for this mythical consumer everyone keeps talking about. It simply is. Target (TGT) likes to take credit for the quarterly reports in which it beats The Street, regaling us with tales of execution, marketing prowess and efficiency. And then, when it (inevitably) blows it the next quarter, we get treated to a story about how the consumer is struggling with “headwinds” and “uncertainty.” So it’s basically “heads we are great retail operators and tails it’s someone else’s fault.” I sometimes think TJX Companies (TJX) was put on earth to embarrass whoever is the current Target CEO, because they execute all year long, every year, regardless of what’s going on. They don’t spend time trotting out Dickensian elegies for the poor, put-upon American shopper. They just beat, raise and then beat again. Sean’s going to bring you up to speed on TJX and their incredible performance since we first wrote it up in August. TJX operates 5,000 stores, many of which are in the vicinity of a Target store. We’re also going to tell you about Ulta Beauty (ULTA) , which is a Best Stock in the Market name as well as a turnaround story. Spotlight: Consumer and retail stocks Sean — We’ve spent plenty of time obsessing over health care lately — but there’s another corner of the market that deserves attention. Consumer discretionary has been the laggard of 2025, up just 3.7% year to date. That’s a staggering 12.7 percentage points behind the S & P 500. To put it in perspective, even the U.S. Aggregate Bond Index is up 7%. We’re starting to see some buyers in these stocks heading into the holiday season. Sixteen percent of the S & P Retail ETF (XRT) hit new 52-week highs, the highest amount since February. TJX is a top 10 holding within this ETF, we wrote it up on Aug. 7 . Take a look at performance since then vs the S & P 500: TJX is hitting all time highs during a time that’s been difficult for consumers. Consumers are looking for value when $22 salads are becoming the norm. TJX’s pricing philosophy is intentionally decentralized and market-responsive to deliver as much value as possible. Rather than imposing margin targets or dictating ticket prices from headquarters, the company empowers its merchants to determine appropriate retail levels. TJX also refuses to lead the market on pricing. It observes what competitors do and selectively adjusts only when cost structures or competitive dynamics warrant it. The company continuously validates this approach through weekly SKU-level performance data and ongoing consumer research, both of which show extremely strong value perception scores. TJX’s value strategy helped deliver a 5% comparable revenue gain in Q3 2026 and continues to position the company to win market share. Earnings grew 10% in fiscal 2023 to $2.97, surged nearly 30% in fiscal 2024 to $3.86, and advanced another 10% in fiscal 2025 to $4.26. Looking ahead, TJX raised its full-year fiscal 2026 earnings guidance during the Q3 call on Nov. 19, now expecting diluted EPS of $4.63 to $4.66, representing about 9% growth over fiscal 2025. For the fourth quarter, management anticipates diluted EPS of $1.33 to $1.36, an increase of 8% to 11% versus last year’s $1.23, reinforcing the company’s confidence in its momentum heading into year-end. Ulta is another one actively taking market share. Here’s ULTA’s chart the past five years: ULTA has been focused on re-engaging with its customer base post-pandemic. Ulta Beauty’s loyalty program continues to be a major engine of growth. Membership climbed to a record 45.8 million in Q2 FY26, up 4% from a year earlier, and stood at 44.6 million in Q4 FY25, a 3% year-over-year increase. Loyalty members now account for roughly 95% of total sales. Ulta Beauty has been leaning into high-impact partnerships and creative marketing to deepen this brand engagement. The company served as the official beauty retail partner for Beyoncé’s Cowboy Carter Tour and had exclusive products and experiences at both Coachella and Lollapalooza. Its Super Bowl campaign drove record social engagement, too. The momentum continued in-store, with over 30,000 events held in Q2 FY26 and 20,000 in Q1. These brand initiatives are translating directly into stronger performance. Q2 FY26 delivered 6.7% comparable sales growth, with positive comps across every channel and major category. Ulta gained market share this past quarter and saw meaningful improvements in in-store conversion and guest satisfaction. In Q1 FY26, the company posted 2.9% comparable sales growth, alongside accelerating member growth, higher brand engagement, and stronger conversion both in-store and on the app. Risk management Josh — OK, here’s TJX now: Yes, the stock is significantly higher than where we first wrote it up. No, that doesn’t matter. Traders should use $140 as a stop if making an entry here. A sell-off below that level invalidates the recent breakout and has you on the sideline awaiting the next set-up. Longer-term investors can use $134 — based on the August gap low — for a risk management level. A break below could lead to an extended period of chop which can be avoided. Let’s do Ulta… I’m zooming out to a five-year weekly closing price chart so I can repeat something you’ve heard me say a lot — I don’t believe in triple tops. Double tops we see all the time. Triples, in my opinion, almost always get broken to the upside. It’s not superstition. It’s the fact that the buyers are rarely that wrong three times in a row. Eventually, they convince the sellers of the futility of fighting and the price breaks through. Sometimes it’s just a matter of three attempts (or four) to exhaust all the remaining sellers. I think Ulta is exhausting that selling supply as we speak. The $570 level is your green light to add more because the breakout is real and present. That could take awhile but I wouldn’t bet against it. Looking at the one-year chart below and it’s a bit murkier. Ulta made a 52-week high at $570 in October with confirming relative strength in the high 60’s but the buyers were turned away from a new all-time high, hence the (temporary) triple top. As you can see above, support around the $500 level held twice since then, telling you exactly where you want to set your stop (on a closing weekly basis, don’t get whipsawed intraday). I’d buy some now and reload higher during the next attempt at the $570 breakaway. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . 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