Top Retail Picks for the Holiday Season

Bridget Weishaar: Like last year, we see holiday 2016 posting muted growth in the low single digits. This is supported by decent wage increases but offset by rising healthcare and rent expenses. We also see significant performance differences with home, entertainment, and online continuing to take share from apparel and electronics categories.

In apparel, although we expect the category to continue to underperform and be promotional, easy compares and improved inventory position will likely drive demand stabilization and merchandise margin gains. Unseasonably warm weather continues to be a headwind but, given last year's low base, we think the growth impact will be smaller.

After taking into account all of these trends, we highlight Williams-Sonoma and Amazon as best ideas going into the holiday season.