In retail stocks, as in consumer buying, the big question is: where to shop? With the third quarter just around the corner, Morgan Keegan senior analyst Brad Stephens offered CNBC some ideas.
His first pick is Warnaco.
"It's 70 percent the Calvin Klein brand," he told CNBC. "According to a recent Fortune study, that's the world's number-two most-desired brand behind Gucci. You get 55 percent of your sales outside the country."
Stephens also likes Fossil.
"In addition to the Fossil brand, they also have the global licenses for Burberry, Armani, Diesel, and DKNY," he pointed out. "This is a (company) that gets 52 percent of its sales from wholesale outside the U.S., another 6 or 7 percent from retail stores outside the U.S."
The one American-based retailer on his list is Aeropostale.
"We're really not too bullish on the U.S. economy right now," he admitted. "When you look at Aero, you've got pricing 30 to 40 percent below the other teen retailers in the mall, such as American Eagle or Hollister [a unit of Abercrombie & Fitch