Retail Stocks Riding the Wave of a Stronger US Dollar

With oil prices above $100 per barrel and inflation lingering, currency swings are back in focus for investors. The strength of the US dollar can benefit some companies while hurting others, depending on their exposure to imports or exports.

Three retail stocks that could take advantage of a stronger US dollar are NEXT (LSE:NXT), Watches of Switzerland Group (LSE:WOSG), and Citi Trends (CTRN).

NEXT is a UK-based retailer with a significant online presence and international footprint. It generates most of its revenue from the UK, but also has operations in Europe, Asia, and other markets. With a broad international reach, NEXT can benefit if sourcing costs ease due to a stronger dollar.

Watches of Switzerland Group is a luxury retailer that sells high-end watches and jewelry through various banners, including Watches of Switzerland, Goldsmiths, and Mappin & Webb. The company generates most of its revenue from the UK and Europe, but also has US retail operations. A strong US dollar can ease dollar-based sourcing costs for this UK-headquartered importer.

Citi Trends is a US value retailer that focuses on affordable apparel, footwear, accessories, and home goods for African American customers in neighborhood-based stores. With a significant portion of its revenue coming from imports, Citi Trends can benefit if the stronger dollar helps manage costs during inflationary times.