Stocks to Watch for the First Trillion Dollar Holiday Shopping Season

With Black Friday approaching at the end of the month, savvy investors may be eying the retail sector for the possibility of lucrative returns. To that point, the day after Thanksgiving will officially kick off what is projected to be the first holiday shopping season in U.S. history to surpass $1 trillion in retail sales.

According to the National Retail Federation (NRF), American consumers are expected to spend between $1.01- $1.02 trillion during November and December 2025, which would mark a 3.7%-4.2% increase over last year’s total of $976 billion.

Keeping this scenario in mind, here are a few retail stocks and an ETF to consider as a potentially record-breaking holiday shopping season approaches.

Retail Leaders With an Extensive Reach

Amazon AMZN and Walmart WMT stand out among retail leaders with diverse, resilient business models that can capitalize on the peak holiday shopping season while also generating multiple revenue streams.

Amazon especially stands out in this regard, as the e-commerce giant has evolved into a platform-based ecosystem with a massive profit engine regarding AWS, its AI-enhanced cloud-computing services. Additionally, Amazon is seeing robust growth in its subscription services like Prime Video, which are being boosted by advertising revenue from sponsored listings and display ads. Amazon holds the top spot among global cloud providers and is second to Netflix NFLX as it relates to worldwide streaming subscribers.

It’s also noteworthy that Amazon’s e-commerce operations have been significantly enhanced by robotics, seeing productivity gains by improving speed, accuracy, and efficiency across its fulfillment network. Notably, over 1 million robots have been deployed across Amazon’s global operations since it acquired Kiva Systems in 2012. These include AI-powered mobile robots, robotic arms, and automated packaging systems that handle sorting, lifting, and transporting goods.

Walmart, on the other hand,  has made significant strides from being a traditional brick-and-mortar powerhouse to taking some of the online market share as well. Having a niche as a grocery provider has made the omnichannel retailers' e-commerce expansion unique and successful, with Walmart now bringing in annual digital sales of more than $100 billion. Low-cost pharmacy services, including flu immunizations, have supported Walmart’s budget-friendly retail offerings that have been much desired amid a high inflationary environment.

At the moment, Amazon and Walmart stock both sport a Zacks Rank #2 (Buy) and are expected to post new peaks in Q4 sales after posting quarterly records of $187.79 billion and $169.59 billion last year, respectively.  

CROX is a Top Apparel Stock to Buy for a Rebound    

Attributed to higher tariffs, apparel leaders have been the hardest hit stocks in the retail sector, and Crocs CROX is one of the most appealing to consider for a rebound. Sporting a Zacks Rank #1 (Strong Buy), the selloff in Crocs stock is starting to look overdone as a leading comfort footwear brand, with CROX trading at just 6X forward earnings.

Trading at a steep discount to its Zacks Textile-Apparel Industry average of nearly 17X forward earnings, Crocs' EPS is expected to dip 8% this year, but is projected to rebound and rise 4% in FY26 to $12.60.

More reassuring is that FY25 and FY26 EPS estimates are up over 5% in the last 30 days. This comes as Crocs recently crushed its Q3 earnings expectations by 22% at the end of October, posting quarterly EPS of $2.92 compared to estimates of $2.39.   

Honorable Mentions & an ETF to Consider

In terms of other retail leaders with a rather extensive reach, Costco COST is worth watching with a Zacks Rank #3 (Hold). Sharing a similar ranking, a few more apparel stocks to consider for a potential rebound amid expectations of a record holiday shopping season include Lululemon LULU, Nike NKE, and Under Armour UAA.

Furthermore, the Consumer Discretionary Select Sector XLY ETF is another way to get exposure to some of the top retail stocks, with Amazon, Nike, and Lululemon being among its holdings. The XLY currently lands a Zacks Rank #3 (Hold).  

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This article originally published on Zacks Investment Research (zacks.com).

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