The prospect of adding shares of retail companies that weren’t considered “essential businesses” was almost unthinkable a year ago, as the pandemic kept shoppers at home and caused big issues for the majority of retailers that generate revenue with physical stores. Fast forward a year later and the story surrounding companies in the retail industry has improved dramatically. Thanks to the widespread distribution of vaccines, relaxed social distancing restrictions, and improving consumer spending, many of these stocks are nicely positioned to outperform in the near term.

Investors should note that many major retailers were forced to cut costs and focus on digitizing their businesses over the last year, which are both moves that could handsomely reward shareholders in the long term. While it’s very important to be selective with retail stocks given how e-commerce trends are rendering many of their businesses obsolete, there are certain companies that are leaps and bounds above the competition and worthy of a place in any portfolio.

If you are interested in the retail sector at this time, here are the 3 best retail stocks to shop for in August:

Ulta Beauty (NASDAQ: ULTA)

Lululemon (NASDAQ: LULU)

Costco Wholesale Corporation (NASDAQ:COST)