Retail Winners for 2026: 4 Stocks Investors Should Buy Now

After a volatile year marked by inflation, tariff uncertainty, high borrowing costs, and cautious consumer spending, the broader retail sector has entered 2026 with a more constructive setup. While shoppers remain value-conscious, easing inflation in key categories, stabilizing supply chains, and gradual normalization in freight and input costs are improving operational conditions for retailers. Importantly, the Fed has begun cautiously cutting interest rates after an extended period of restrictive policy.However, consumer behavior remains uneven. Higher-income shoppers continue to spend selectively on premium categories, while price-sensitive households gravitate toward discounts, private labels and everyday essentials. This divergence is shaping demand across the retail landscape. Companies with well-integrated pricing, loyalty programs, merchandising and an omnichannel ecosystem are better positioned to drive traffic without sacrificing margins.While stores remain the dominant shopping and fulfillment channel, sustained e-commerce growth, supported by faster delivery, improved app interfaces and the integration of AI-driven recommendations, remains crucial for success. Companies investing in online shopping experiences, along with effective last-mile delivery, are likely to attract a larger customer base. The combination of physical and digital channels — such as click-and-collect options and curbside pickups — provides a competitive advantage, as consumers seek convenience and flexibility.For investors, this backdrop makes stock selection in 2026 less about broad sector exposure and more about identifying retailers with structural advantages. The best opportunities should come from retailers that combine steady demand drivers with brand strength, operational efficiency and a proven ability to adapt to shifting shopping behavior. Against that backdrop, here are four retail stocks investors should consider buying: Five Below, Inc. FIVE, American Eagle Outfitters, Inc. AEO, The Gap, Inc. GAP and Ulta Beauty, Inc. ULTA.Past Year Performance of FIVE, AEO, GAP & ULTAImage Source: Zacks Investment Research4 Prominent Picks for 2026Five Below: Value-Led Model Driving Traffic and LoyaltyFive Below continues to strengthen its position as a leading value retailer, offering a trend-focused product assortment that strongly appeals to its core demographic of teens and tweens. Management noted consistent increases in foot traffic, driven by engaging merchandising, frequent product updates and a treasure-hunt shopping experience that encourages repeat visits. Operational innovations, such as the use of AI for inventory management and a shift toward creator-led social media marketing, have generated significant traffic growth and enhanced customer engagement. Supported by a strong pace of new store openings and steady momentum across all household income groups, the brand demonstrates notable resilience and gains in market share.The Zacks Consensus Estimate for Five Below’s current and next financial-year sales implies growth of 19.6% and 8.9%, respectively, from the year-ago period. This Zacks #1 Ranked (Strong Buy) company has a trailing four-quarter earnings surprise of 62.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here. Image Source: Zacks Investment ResearchAmerican Eagle: Revitalizing Brands and Driving GrowthAmerican Eagle is demonstrating a powerful turnaround driven by the exceptional performance of its Aerie and OFFLINE brands, which continue to capture significant market share. The company's strategic pivot toward high-impact marketing campaigns and high-profile collaborations has successfully revitalized brand desirability, leading to accelerated traffic and strong customer acquisition across all digital and physical channels. Operational resilience is evident through a disciplined focus on inventory management, cost efficiencies and a modernized store remodeling program that elevates the overall shopping experience. By leveraging its dominance in core categories like denim while aggressively expanding into lifestyle segments such as activewear and sleep, the company is effectively broadening its reach across diverse consumer cohorts.The Zacks Consensus Estimate for American Eagle’s current and next financial-year sales calls for growth of 2.4% and 2.6%, respectively, from the year-ago period. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 35.1%, on average. Image Source: Zacks Investment ResearchGap: Brand Reinvigoration Strengthens the PortfolioGap is showcasing a powerful operational turnaround boosted by the successful execution of its brand reinvigoration playbook. The company is leveraging high-impact marketing and culturally relevant strategic partnerships, such as the viral "Better in Denim" campaign and designer collaborations, to attract younger demographics while maintaining core customer loyalty. Operational strengths, including a modernized supply chain integrated with AI and automation, are driving significant productivity gains and providing the agility needed to mitigate external headwinds. With a sharpened focus on "must-win" categories like denim, active, and kids and baby, alongside a thoughtful expansion into the beauty sector, the company is effectively broadening its market reach and revenue potential.The Zacks Consensus Estimate for Gap’s current and next financial-year sales implies growth of 1.8% and 2.4%, respectively, from the year-ago period. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 19.1%, on average. Image Source: Zacks Investment ResearchUlta Beauty: Loyalty and Exclusivity Power Beauty LeadershipUlta Beauty is demonstrating powerful momentum through its "Ulta Beauty Unleashed" strategy, consistently delivering performance that exceeds expectations across all major categories and channels. The company's unique "low-to-luxury" brand assortment is a significant competitive advantage, bolstered by successful exclusive launches and a rapidly expanding K-beauty portfolio that resonates with younger demographics. Strategic initiatives are fueling growth, including the successful launch of a new digital marketplace and aggressive international expansion into Mexico and the Middle East. Furthermore, Ulta is driving operational excellence by modernizing its supply chain with advanced automation and leveraging its record-breaking loyalty program to deepen customer engagement and personalization.The Zacks Consensus Estimate for Ulta Beauty’s current and next financial-year sales indicates growth of 8.7% and 5.8%, respectively, from the year-ago period. This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 15.7%, on average. Image Source: Zacks Investment Research#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report Ulta Beauty Inc. (ULTA): Free Stock Analysis Report The Gap, Inc. (GAP): Free Stock Analysis Report Five Below, Inc. (FIVE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks