Looking for Growth Stocks? Here Are 4 US Consumer Companies You Can Look at

The universe for growth stocks is vast.

Investors can turn to the US stock markets of the New York Stock Exchange (NYSE) and NASDAQ to look for attractive growth stock ideas.

You can look for fast-growing software-as-a-service companies or search through the restaurant sector to find interesting food and beverage stocks to include in your portfolio.

The consumer goods and services sector is also an attractive industry as you can gain exposure to growing consumer trends that are shaping the industry.

Here are four US stocks with growing revenue and profits that demonstrate bright prospects.

ULTA Beauty (NASDAQ: ULTA)

ULTA Beauty is the largest speciality US beauty retailer that sells a wide range of cosmetics, fragrance, skin and hair care products.

The company operates 1,362 retail stores across 50 states as of 29 July 2023.

The cosmetics company has shown impressive growth over the past five years.

Sales grew from US$6.7 billion in fiscal 2019 (ending 31 January) to US$10.2 billion in fiscal 2023 (FY2023).

Net profit increased by 88.7% over this period to hit US$1.2 billion.

ULTA Beauty also enjoyed positive comparable store sales for four out of the five years with the pandemic year (FY2021) being the exception.

The number of stores increased from 1,174 in FY2019 to 1,355 in FY2023.

The company’s momentum has carried over into FY2024.

For the first half of FY2024 (1H FY2024), revenue improved by 11.2% year on year to US$5.2 billion.

Net profit inched up 3.2% year on year to US$647.2 million and the business generated a positive free cash flow of US$224.1 million.

Management has disclosed that the US beauty products sector has a total addressable market of US$104 billion, giving the company ample room to grow its top and bottom lines further.

Tractor Supply Company (NASDAQ: TSCO)

Tractor Supply is the largest rural lifestyle retailer in the US and operates 2,198 Tractor Supply stores in 49 states as well as 195 Petsense stores in 23 states.

The retailer has enjoyed steady growth over the years as it expanded its store count across the country.

Sales came in at US$7.9 billion in 2018 and grew to US$14.2 billion by 2022.

Earnings per share more than doubled from US$4.31 to US$9.71 over this period.

At the end of 2018, Tractor Supply operated 1,765 stores but has since grown this to the current 2,198 at the end of September 2023.

For the first nine months of 2023 (9M 2023), the rural products retailer saw revenue increase by 6.8% year on year to US$10.9 billion.

Net profit inched up 5.1% year on year to US$859.3 million.

The company also raised its dividend by 12% year on year to US$3.09 per share for 9M 2023.

Back in July, Tractor Supply announced a new long-term target of 3,000 stores in the US and plans to increase new store openings to 90 per year.

Lululemon (NASDAQ: LULU)

Lululemon is an athletic apparel and footwear company that sells products for yoga, running, training and other sports activities.

The company has witnessed sharp growth in the past three years as more customers purchase its apparel, footwear, and accessories.

Revenue rose from US$4.4 billion in fiscal 2021 (ending 31 January) to US$8.1 billion in FY2023.

Net profit climbed from US$588.9 million to US$854.8 million over the same period.

The athleisure retailer also generated consistent positive free cash flow in all three fiscal years.

The momentum has carried on into FY2024.

For 1H FY2024, Lululemon reported a 20.9% year on year jump in revenue to US$4.2 billion.

Net profit leapt 31.8% year on year to US$632 million.

The company has announced an ambitious plan called “The Power of Three x2” to double its revenue to US$12.5 billion by 2026 through product innovation, market expansion, and the improvement of customers’ experience.

In September, Lululemon announced a five-year partnership with Peloton (NASDAQ: PTON) with the latter becoming the exclusive digital fitness content provider for Lululemon.

Netflix (NASDAQ: NFLX)

Netflix is a streaming TV company that provides a wide slate of TV shows and movies for its customers.

The streaming giant has seen phenomenal growth in the past three years as it captures more market share from competitors.

Revenue grew from US$25 billion in 2020 to US$31.6 billion in 2022 with net profit jumping from US$2.8 billion to US$4.5 billion over the same period.

Netflix’s subscriber base has also increased in tandem.

At the end of 2019, the number of subscribers stood at 167.1 million but in three years, this has grown by 38% to 230.75 million.

For 9M 2023, Netflix saw growth continue with revenue improving by 4.7% year on year to US$24.9 billion.

Net profit inched up 0.8% year on year to US$4.5 billion.

The company saw its free cash flow more than quadruple year on year in 9M 2023 to US$5.3 billion.

Its subscriber base at the end of 30 September 2023 also expanded to 247.2 million members.

The business has several catalysts that should allow it to continue to grow its revenue, profits, and membership base.

The cancel reaction to its paid sharing initiative has been low, suggesting that more households are converting to full-paying memberships.

Pricing has also increased in several regions as Netflix promises to deliver a wider content slate to its members.

Finally, the launch of an ad-supported tier means that the company has opened up an additional revenue source that looks set to grow larger in future.

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Disclosure: Royston Yang owns shares of Tractor Supply.

The post Looking for Growth Stocks? Here Are 4 US Consumer Companies You Can Look at appeared first on The Smart Investor.