Three Retail Stocks to Buy Now with "Sizzling" Sales in 2013

If you're currently looking for stocks to buy, now's a great time to take a close look at retailers.

You see, a combination of factors – an improving job market, steaming summer temperatures and lower prices – have helped retailers post sizeable sales gains recently.

And that has given their stocks a significant boost.

The Spider S&P Retail ETF (NYSEArca: XRT) proves that American shoppers have bounced back from the economic malaise. They're opening up their wallets for new clothes, movies and electronics at XRT components like Macys Inc. (NYSE: M) Netflix Inc. (Nasdaq: NFLX) and Best Buy Co. Inc. (NYSE: BBY).

Just last week, XRT jumped to a new multiyear high. Shares are now trading around $80, a gain of 30.7% year to date (YTD).

But those gains are on the low end.

Shares of several hot retailers are doing even better than that.

San Francisco-based Bebe Stores, Inc.'s (Nasdaq: BEBE) stock has ratcheted up by 39.8% YTD, fashionista favorite Express Inc. (NYSE: EXPR) has gained 48.3% and discounter Stein Mart Inc. (Nasdaq: SMRT) has climbed a whopping 93.3%.

And there's more good news to come…

U.S. Retail Sales Humming

With a rising stock market and home values increasing, consumers are feeling better in 2013 than they have felt in years.

Same-store sales at shops open at least a year – which smoothes out the volatility of openings and closings – rose 4.1% in June from the same period a year earlier, according to Retail Metrics Inc.

June's results beat analysts' forecasts of 3.7% and were the largest since sales swelled 5.1% in January.

Retailers had struggled through the spring as they dealt with chilly temperatures and "an economic soft patch," said the group's president, Ken Perkins.

Analysts at Jeffries Group LLC (NYSE: JEF), the world's largest independent investment bank, are positive on retailers as a whole and believe they have still have plenty of room to run from here.

They say retailers are on an upwards trajectory for the next several years, driven by three leading indicators — lean inventories, cheaper raw materials, improved consumer sentiment – which are accelerating free cash flows

The Best Retail Stocks to Buy Now

But identifying which stocks to buy in the crowded retail landscape can be tricky. Fickle buyers can turn today's hottest trends into yesterday's news in no time.

"When it comes to shopping, sizzle sells. And retailers know it," according to Motif Investing, which follows a portfolio of leading retailers. "Successful retailers can get us to open our wallets with a new look or a reinvigorated experience."

The key benchmarks for determining the fate of retailers are growth of same store sales and store expansions.

Successful retailers show their glitter by growing sales even in economic downturns and they continue to open new stores to meet demand. According to Thomson Reuters, 3% same store sales growth indicates a retailer is on the upswing.

Here are three retail stocks to buy now that have shown they know how to tap into America's shopping habits:

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