The retail sector got a boost with the Commerce Department issuing a report last week on retail and food services sales for the month of November. The data showed that November sales increased 0.8% sequentially to $492.7 billion, surpassing expectations. Sales increased 5.8% from the year-ago period. Meanwhile, total sales for the September 2017 – November 2017 period were up 5.2% from the year-ago period.

The retail sector has been showing signs of stabilizing with the industry performing better than the overall market year to date. Factors like job and wage gains, increasing consumer confidence and willingness to spend are responsible for the strong start to the holiday season. These factors are expected to continue driving sales in the coming months.

Segments that are doing particularly well include online stores, electronics and appliances, and furniture and home furnishings. Clothing and accessories are also doing well.

With expectations high for a strong holiday season, here is a look at four retail stocks that boast of a favorable Zacks Rank – Zacks Rank #1 (Strong Buy) or #2 (Buy). 

Dollar Tree, Inc. (DLTR – Free Report) : North America’s leading operator of discount variety stores, Dollar Tree operated 14,744 stores across 48 states and the District of Columbia and five Canadian provinces as of Oct 28, 2017. The company’s brands include Dollar Tree, Family Dollar, and Dollar Tree Canada. Dollar Tree has surpassed earnings expectations in three of the last four quarters with an average surprise of 7.4%. The Zacks Rank #2 stock has seen the Zacks Consensus Estimate for current-year earnings being revised 3.4% upward over the last 30 days.

Dollar Tree’s shares are up 37.7% year to date, significantly outperforming the 10.8% rally of the industry it belongs to.

Wal-Mart Stores, Inc. (WMT – Free Report) : Omni-channel retailer, Wal-Mart, through its retail stores, online presence, and through mobile devices sees more than 260 million customers and members visiting the company’s 11,600+ stores and eCommerce websites every week. The company delivered positive earnings surprises over the last four quarters with an average surprise of 2.2%.