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Top Cyclical Stocks for Long-term Investors to Invest Now

top cyclical stocks for long-term investors

United States economy continues to pick up pace just ahead of holiday season, supporting investors’ confidence in equity market. As per day released by Washington, US economy saw an expansion at an annual rate of ~5% between July and September, which was the fastest growth rate in around 24 months. Growth was somewhat surprising because the US Fed continues to focus on reducing consumer spending by raising the interest rates. Analysts kept growth numbers for 3Q of FY23 to a modest ~4.5% in line with global trends. Experts believe this is the best time to invest in top cyclical stocks for long-term investors. 

Statement of Government of United States on numbers hinted ramping up of consumer spending, private inventory investment, and federal government spending as key reasons behind such growth rate. Recent data has supported investors’ confidence in the US economy just before the start of holiday season, with cyclical stocks, which benefit from holiday spending, like The Walt Disney Company (NYSE: DIS) and The Home Depot, Inc. (NYSE: HD) expected to surpass the performance of market over coming months. Therefore, top cyclical stocks are expected to outperform the companies having lower market share and weak fundamentals. 

The companies which continue to operate in cyclical sector, such as shopping, retail, and travel, were chosen for this list. To give readers more insights on the content investment choices, business fundamentals have been discussed too. 

With this in mind, let us now have a look at some of the top cyclical stocks for long-term investors to invest now. 

1. 1-800-Flowers.Com, Inc.

The company is a United-States-based provider of gourmet food & gift baskets, consumer floral, and BloomNet wire service. 

It released its 1Q24 financial results, in which its total consolidated revenues fell ~11.4% to $269.1 million in comparison to total consolidated revenues of $303.6 million in previous-year period. 

Gross profit margin of the company in 1Q24 grew by ~450 basis points to 37.9% against ~33.4% in the prior-year period. Gross profit margin expansion stemmed from improvements throughout its 3 business segments and mainly within gourmet foods and gift baskets segment, which went up by ~830 basis points to ~31.5%. Gross profit margin was supported by lower ocean freight costs, its strategic pricing initiatives, a fall in some commodity costs and better inventory management. 

Net loss for 1Q24 came in at $31.2 million in comparison to net loss of $33.7 million in the prior year period. 

As the company looks ahead to holiday period in current environment, it anticipates its sales trends to see some improvement as its gifting business has historically proven to be much healthier and more resilient during holiday periods. Consumers believe holiday gifting periods as less discretionary.

For FY24, year-over-year trends should improve during holiday period and into 2H of fiscal year. The company anticipates continued improvement in its gross margin. Adjusted EBITDA of the company is expected to be between $95 million – $100 million and free cash flow is anticipated in the range of $60 million – $65 million. 

2. Kohl’s Corporation

The company carries out operations through 1,165 department stores in 49 states which sell moderately priced private-label and national brand clothing, shoes, accessories, cosmetics, etc. 

In 2Q23, net sales of the company saw a decline of 4.8% and comparable sales fell 5.0%, with its inventory declining 14%. The company maintained strong sales momentum in Sephora at Kohl’s and managed expenses tightly. Further, strong cash flow generation enabled the company to reduce its borrowings in the period.

Operating income of the company came in at $163 million in comparison to $266 million in the prior year. As a percentage of total revenue, operating income was held at ~4.2%, exhibiting a decline of 233 basis points year-over-year. Operating cash flow in 2Q23 came in at $430 million.

For FY23, net sales of the company is expected to see a decline of (2%) – (4%), which includes impact of the 53rd week which is worth ~1% year-over-year and its operating margin is expected to be ~4.0%. Diluted EPS is expected between $2.10 – $2.70, excluding any non-recurring charges and capital expenditures are expected to be in the range of $600 million – $650 million.

3. American Eagle Outfitters, Inc.

American Eagle Outfitters Inc has been categorised as an apparel and accessory retailer with stores in U.S., Canada, Mexico, and Hong Kong.

In 2Q23, the company saw total net revenue of $1.2 billion, which was was up slightly in comparison to 2Q22. Store revenue went up by ~4% and its digital revenue fell 7%. 

Gross profit of the company came in at $453 million, which grew by ~22% in comparison to $370 million in 2Q22 and this exhibited gross margin rate of ~37.7% against 30.9% last year. Merchandise margin expansion stemmed from lower markdowns exhibiting inventory control and lower transportation and product costs. Gross profit was benefitted from early profit improvement initiatives, lower delivery, distribution and warehousing costs.

Operating income for the said quarter came in at $65 million, exhibiting 5.4% margin. This year, the company initiated comprehensive review of cost structure, and it has identified near-term opportunities, mainly within gross margin, representing ~70% of the company’s expense base.

For full year, the company expects revenue to increase by low-single digits against last year in comparison to prior guidance for revenue growth in the range of flat to down low-single digits. Operating income should be between $325 million – $350 million. 

For 3Q, the company expects operating income of between $115 million – $125 million.


While above are some of the top cyclical stocks for long-term investors, there are several other cyclical stocks which are expected to outperform the indexes in next few months. Cyclical stocks are primarily for opportunistic investors as these stocks perform well because of the higher spending. 

At the time global slowdown, cyclical shares can sometimes become undervalued. Thus, such companies provide valued opportunities for investors who can spot top cyclical stocks with strong fundamentals and long-term growth potential. 

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CEO & Editor
I'm Ved Prakash, Founder & Editor @Newsblare Media, specialised in Business and Finance niches who writes content for reputed publication such as,, Motley Fool Singapore, etc. I'm the contributor of different... news sites that have widened my views on the current happenings in the world.

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