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Loop Capital’s favorite retail stocks for the 2025 holiday shopping season are Best Buy and Five Below . This year, major consultancies that track the state of the consumer are forecasting retail sales will increase 3.6% from last year, slower than a year ago and also a deceleration from recent trends, Loop Capital said. That makes sense given a cloudy U.S. economy, with waning consumer confidence and a weaker job market. But while this backdrop gives Loop Capital analyst Anthony Chukumba “significant pause,” he still sees Best Buy and Five Below as the two clear winners for the holiday season. Chukumba shared that Best Buy is traditionally one of his favorite long ideas around this time of year. “That said, our conviction level is much higher than normal this year for three primary reasons: (1) we believe Best Buy is poised to benefit from the ongoing Windows 11 refresh cycle; (2) we expect smartphone sales to continue to grow in F4Q 2025; and (3) we think video game sales will be particularly robust, driven by the Nintendo Switch 2,” he added. Chukumba noted that Nintendo recently hiked its net sales forecast for fiscal 2026 by 18%, and now sees Switch 2 hardware and software unit sales climbing by 27% and 7%, respectively. Shares of Best Buy are down 10% this year. Chukumba also applauded Five Below’s merchandising improvements under CEO Winnie Park. They range from “increased emphasis on product newness, leaning harder into licensed merchandise trends, and placing above $5.00 items in line as opposed to solely in the Five Beyond department,” he added. Five Below’s recent partnerships include movie releases including “Lilo & Stitch,” “Wicked: For Good” and “A Minecraft Movie.” “Finally, we believe Five Below is poised to benefit from consumers ‘trading down’ from higher priced alternatives given the aforementioned U.S. macroeconomic uncertainty,” Chukumba wrote. Five Below stock has soared 46% in 2025.
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