Trick Or Treat: 5 Stocks For Halloween With Record Spending Expected For Holiday

Higher inflation has led to people paying more for Halloween costumes and candy for the annual holiday in 2022. That hasn’t stopped people from shelling out hundreds of dollars on costumes and candy. Here's a look at the holiday expectations and five spooky stocks to watch.

What Happened: With millions of people dressing up for Halloween, including potentially the world’s richest person, the holiday continues to be an annual tradition that involves costumes and candy.

The price of Halloween candy is 13% higher, according to a report from the Bureau of Labor Statistics, shared by NPR. The report said this is the largest jump in candy prices ever recorded by the CPI. Candy prices are also up 2% since August, marking one of the largest increases of any food category.

Despite the higher prices, the National Retail Federation said extravagant spending on the holiday will increase. Americans will spend an estimated $3.1 billion on candy for the 2022 Halloween holiday.

Costumes aren’t individually tracked like candy, but are part of the overall clothing sector that has seen prices up 5.5% since last year. Homemade costumes could cost more for the 2022 holiday, with fabric and supplies up 11% since last year.

Reports say that 69% of American consumers will celebrate Halloween in 2022, up from 65% in 2021. Total spending on the holiday is expected to reach $10.6 billion, which would break the 2021 record of $10.1 billion. The average consumer is expected to spend $100 on average for candy, decorations and costumes for the holiday, the second-highest amount from an NRF survey. Last year, the survey saw consumers spending an average of $102.74.

“As consumers continue to return to pre-pandemic behaviors, retailers are prepared to meet that demand and help make this holiday a fun and memorable one,” NRF CEO Matthew Shay said.

Consumers will celebrate by passing out candy (67% surveyed), decorating their home (51%), dressing up in costume (47%), carving a pumpkin (44%), throwing a Halloween party (28%) or dressing up their pet (20%) according to the research study.

Here’s a look at five publicly traded companies that could benefit from increased spending around the Halloween holiday.

Tootsie Roll: Candy company Tootsie Roll Industries TR is a popular option for anyone looking to invest in the growth of spending on the holiday. Tootsie Roll variety packs are a popular option for people handing out candy, as they come at a lower price point than some of the other candy bags for the holiday. Tootsie Roll shares are positive in 2022 compared to the numerous public companies trading down on the year. Shares hit a new 52-week high of $41.20 on Halloween Monday.

Hershey: Anyone trick or treating will likely see a piece of candy with a Hershey’s logo or Reese’s logo, two candy brands owned by The Hershey Co HSY. Like Tootsie Roll, The Hershey Company has seen shares increase in value in 2022 and hit new 52-week highs on Halloween. Hershey’s is a $50 billion company and is set to report financial results on Friday, Nov. 4, the week of Halloween. Comments from the company could provide a look at how strong Halloween spending was in 2022.

Jakks Pacific: Toy company Jakks Pacific Inc JAKK is the owner of Disguise, the world’s leading costume design and manufacturing company. With an expected increase in spending that could be related to costumes, Jakks Pacific could be one of the companies that benefit in 2022. A viral social media hit in 2022 was people sharing their fake costume ideas with a Spirit Halloween logo. While Spirit is owned by Spencer’s, a privately held retail chain, the trend could have led to more adults buying costumes in 2022. The third and fourth quarters are the company’s biggest quarters for revenue, given the Christmas season. Strong Halloween spending could help give the company an added boost. Jakk’s shares are up 69% year-to-date in 2022.

Party City: Retailer Party City Holdco Inc PRTY could be a popular destination to buy Halloween decorations and costumes. The company announced recently that it was hiring 20,000 additional employees ahead of the Halloween season, a larger number than the amount it looked to add in 2021. This could suggest the retailer is expecting higher sales in 2022 for the holiday. While the company caters to all holidays and celebrations like birthdays, the company could get a boost into the busy holiday party season with a strong Halloween. Shares of Party City are down 72% year-to-date in 2022. The company will report quarterly earnings next week in what could be a preview of the Halloween and Christmas holiday expectations and results.

AMC Networks: Media company AMC Networks AMCX makes the list not because of Halloween candy or costumes, but thanks to its offerings of film and television content related to the holiday and the overall theme of horror and zombies. The company owns streaming platform Shudder, which is one of the leading platforms for horror films, including some original content. The company also owns “The Walking Dead” franchise, which is airing its 11th and final season ahead of several planned spinoffs.

The company refers to itself as “the home for Halloween.” For those not going to Halloween parties or passing out candy, AMC Networks might be getting their money, as content is king on the holiday. Others might sign up for the company’s streaming promotion during the holiday season, helping boost recurring revenue for AMC Networks.

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