For those who took a nap after the turkey dinner yesterday and missed out on the early Black Friday sales that started at some stores on Thursday night, the world is not lost yet. Black Friday is THE shopping day of the year when retailers start giving out eye-popping discounts for the season. It has in American popular culture replaced the proverbial Saturday before Christmas. Shoppers have started flocking to the stores at the crack of dawn for the deep discounts and luring offers. On the other side of the coin, retailers look to make the most of the day to achieve their holiday season sales target.

And they have some very good reasons to cheer. A rebounding economy, falling unemployment rate, higher consumer confidence and improving consumer spending all point to solid sales this year. In hindsight, last year was crippled by the 16-day government shutdown and political impasse. A soft job scene also took out most of the joy from the season.

Data compiled by the nation's largest retail trade group, National Retail Federation (NRF), suggests a 4.1% jump in holiday sales (November and December) to $616.9 billion against 3.1% growth registered last year. This is even better than the 10-year average sales increment of 2.9%. Online sales for this holiday season are also projected to increase 8–11% to approximately $105 billion, according to Shop.org.

Retailers are on their toes, be it with early-hour store openings, promotional events, free shipping on online purchases or heavy discounts. And shoppers are only too eager to fall for the bait eyeing the large discounts that would save money on their Christmas shopping.

While GameStop Corp. (GME - Analyst Report) opened at 12.01 a.m. to woo the early birds, The Home Depot, Inc. (HD -Analyst Report) and Lowe’s Companies Inc. (LOW - Analyst Report) opened at 5 a.m. today. On the other hand, Staples, Inc. (SPLS - Analyst Report) and Big Lots Inc. (BIG - Analyst Report) opened shutters at 6 a.m., while PetSmart, Inc. (PETM -Snapshot Report) at 7 a.m. There are retailers who are starting the day a bit late. Best Buy Co., Inc. (BBY - Analyst Report) and Office Depot, Inc. (ODP - Analyst Report) are opening at 8 a.m., while Costco Wholesale Corporation (COST - Analyst Report) at 9 a.m. 

Competition for sure is going to be intense and the aggressive pricing may hurt margins to some extent. Only time will tell which retailer will emerge as the winner and who will bite the dust. In the end of this chicken game, the customer surely is the real king. Here, we present three retail stocks that could enrich your Black Friday shopping list.

3 Prominent Picks

We suggest investing in PetSmart, a specialty retailer of products, services, and solutions for pets in the U.S., Puerto Rico, and Canada. The stock holds a Zacks Rank #1 (Strong Buy) and has amassed a year-to-date return of roughly 10%. Though the stock looks pricey with a forward P/E (price-to-earnings) multiple of 17.73, it should not disappoint investors given the company's long-term expected earnings growth of 12.6%. This Phoenix, AZ based company delivered an average positive earnings surprise of 4.9% over the trailing four quarters.

Lowe's Companies, a home improvement retailer, is another stock to bet on, carrying a Zacks Rank #2 stock (Buy) and with a long-term earnings growth rate of 15.4%. Shares of this Mooresville, NC based company trades at a forward P/E of 23.62x, a discount to the industry average. And its shares have rallied 29.3% year to date. The company has delivered positive earnings surprises of 2% and 1.7% in the second and third quarters of fiscal 2014.

Another stock that investors may look forward to is Best Buy Co., a multi-channel retailer of technology products in the U.S., Canada, China, and Mexico, which holds a Zacks Rank #2. Although the stock trades at a forward P/E of 16.21x, a premium to the industry average, it still looks attractive from an earnings growth perspective. This Richfield, MN based company has a long-term earnings growth rate of 15% and has posted an average positive earnings surprise of 41.6% over the trailing four quarters.

We believe that the above stocks boast strong fundamentals and growth prospects that can satisfy investors’ appetite for equity market winners.