Retail-Wholesale, which typically performs well in a maturing economic cycle, is among the sectors that are likely to steal the show this reporting season. The sector, in fact, hogs all the attention with the advent of the holiday season. It is time to lift your spirits by adding potential winners to your portfolio with stocks that are likely to trump all odds and stand out with great earnings surprises.

The sector is anticipated to witness bottom-line growth of 23%, while top-line is anticipated to increase 6.1%, per the latest Earnings Preview. Notably, the sector has advanced roughly 14% in a year outpacing the S&P 500’s growth of approximately 8%. The underlying economic strength backed by robust job market, latest tax reform and pro-business policies are acting as catalysts to the sector.

Needless to say, the aforementioned factors play a vital role in elevating consumer confidence, enhancing prospects for retailers. Americans are way more confident now, brushing aside recent hiccups like the U.S.-China trade war. Fall in the number of people claiming unemployment benefits and jobless rate hovering at a 49-year low also foreshadow the same. For obvious reasons, upbeat sentiment is likely to translate into higher consumer spending.

Considering these bullish aspects, industry experts believe that retailers may clink glasses to great holiday sales. Data compiled by the nation's largest retail trade group, National Retail Federation, anticipates a rise of 4.3-4.8% in November and December sales (excluding autos, gas, and restaurant) to $717.45-$720.89 billion. So, start filling your holiday hampers by picking stocks that have a fair chance to outperform.

How to Pick Prospective Winners for the Season

All said, we used the Zacks methodology and identified retail stocks that are poised to beat earnings estimates this reporting cycle. Our research shows that for stocks with the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP, the chance of a positive earnings surprise is as high as 70%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

5 Stocks with High Probabilities to Beat

Investors can count on Macy's, Inc. (M - Free Report), the operator of department store chain. The company delivered an average positive earnings surprise of 19.9% in the trailing four quarters. It has a long-term earnings growth rate of 8.5%. The Zacks Consensus Estimate for the quarter is pegged at 13 cents. The company, which is scheduled to announce third-quarter fiscal 2018 results on Nov 14, has an Earnings ESP of +20.00% and a Zacks Rank #1.

American Eagle Outfitters, Inc. (AEO - Free Report), which is expected to report third-quarter fiscal 2018 results on Dec 5, is also a solid bet. It has a long-term earnings growth rate of 9.6%. The Zacks Consensus Estimate for the quarter under review is pegged at 47 cents. The company delivered an average positive earnings surprise of 2.3% in the trailing four quarters. This specialty retailer of clothing, accessories, and personal care products has an Earnings ESP of +2.95% and a Zacks Rank #1.

You may also consider Burlington Stores, Inc. (BURL - Free Report) with a Zacks Rank #2 and an Earnings ESP of +2.38%. The Zacks Consensus Estimate for the quarter is pegged at $1.05. The company delivered an average positive earnings surprise of 11.4% in the trailing four quarters. It has a long-term earnings growth rate of 20.8%. This off-price retailer of high-quality, branded apparel at everyday low prices is expected to come out with third-quarter fiscal 2018 results on Nov 20.

Target Corporation (TGT - Free Report) with a Zacks Rank #2 and an Earnings ESP of +1.41% also deserves a place in your portfolio. The Zacks Consensus Estimate for the quarter is pegged at $1.10. The company has delivered an average positive earnings surprise of 1.3% in the trailing four quarters. It has a long-term earnings growth rate of 6.7%. This general merchandise retailer is slated to come out with third-quarter fiscal 2018 results on Nov 20.

Another lucrative option is Costco Wholesale Corporation (COST  - Free Report) which operates a chain of membership-only warehouse clubs. The stock has a Zacks Rank #3 and an Earnings ESP of +3.05%. The Zacks Consensus Estimate for the quarter is pegged at $1.61. The company registered positive earnings surprises in the preceding two quarters. It has a long-term earnings growth rate of 10.2%. The company is scheduled to release first-quarter fiscal 2019 results on Dec 13.