Back-to-School Shopping Hits $40B: 3 Retail Stocks to Watch Now

Key Points

• Back-to-school shopping is projected to hit $40 billion in 2025, a key indicator of consumer confidence and economic health.
• Walmart and Costco are capitalizing on value-driven demand, benefiting from omnichannel growth and membership retention.
• Lululemon’s upcoming earnings will reveal how resilient premium retail remains amid rising economic pressure.

It may not be the most wonderful time of the year for retailers, but the back-to-school shopping season comes in a close second. Back-to-school shopping isn’t just about pencils, backpacks, electronics, and sneakers; it’s a key retail event that signals consumer health heading into year-end.

According to Statista, American consumers expect to spend around $40 billion this back-to-school season. That would equate to about $858 in school supply expenses for every American household.

Investors, however, still need to be selective when it comes to retail stocks. Many factors, such as pricing power, business models, and brand appeal, set many companies ahead of the pack. The good news is that many blue-chip names get gold stars, making them stocks to watch for the rest of the year.

Here are three retailers—Walmart Inc. NYSE: WMT, Costco Wholesale Corporation NASDAQ: COST, and Lululemon Athletica Inc. NASDAQ: LULU—that are earning top marks.

Walmart Continues to Capture Everyday Spending

Walmart recently reported second-quarter 2026 earnings that reflected a strong back-to-school season. President and CEO Doug McMillon said the company felt good about how the season went “in terms of units and dollars sold and inventory sell-through.” Even better, key school supplies were priced lower than last year, with one-stop-shop kits available for under $65.

A major bright spot was e-commerce, where Walmart reported double-digit growth. Management also pointed out that the company’s omnichannel strategy is becoming a critical part of its business. 

None of that has had much impact on WMT stock, which is up just over 9% in 2025. One reason for that is that lower-income consumers remain under pressure. However, Walmart continues to benefit from the “trading down” effect, where higher-income consumers shift their spending to value-focused retailers. This gives the company a buffer for continued same-store sales growth and margin stability.

Costco’s Membership Model Will Keep Revenue Strong

Costco may not be the first name investors think of as a back-to-school play, but it should be.

No matter if you are looking for affordable dorm essentials, stocking up on snacks for after-school or sports, or fulfilling teacher wish lists, Costco’s bulk-buying model delivers convenience and savings. In fact, if a Costco customer spent the average $830 this back-to-school season, it would be 10x the basic membership fee.

Also, seasonal shopping periods like back-to-school and the holidays tend to drive traffic, which can lead to both new memberships and higher renewal rates. With renewal rates already above 90% in North America, and with that category making up the majority of the company’s operating income, even modest seasonal sign-ups can have an outsized impact on profitability. 

COST stock is up 3.6% year-to-date, and as long as the company continues to convert seasonal shoppers into long-term members, Costco could see continued gains.

Lululemon Will Be a Barometer of Premium Lifestyle Spending

Athleisure has become part of the dress code for many high school and college students, putting Lululemon in the spotlight this back-to-school season. 

It’s been a rough year for LULU stock, which is down 48% year-to-date. Lululemon has found it difficult to maintain its premium positioning as more competitors have entered the athleisure space.

However, the stock has been up about 1% in the last month, which provides hope that the stock may be ready to rebound. Investors will be paying close attention to Lululemon's upcoming earnings release on September 4 to see if the company can maintain its revenue and earnings as consumers look for value above a label.

It's important to note that Lululemon serves a more affluent demographic that may be less affected by inflation and interest rates. If that holds true, the company could still deliver solid year-over-year performance.