The apparel market has bounced back in style over the past few months. While the overall retail sector is still struggling to get back on its feet, apparel sales have been roaring back to the pre-pandemic levels and are on track for a speedy recovery.
The holiday season preceded by the mass vaccination drive has finally seen people feeling confident about traveling and moving out of their houses, which has given them a reason to buy new apparel. This has been helping stocks like Boot Barn Holdings, Inc.BOOT, Tapestry, Inc. TPR, Tilly’s TLYS and The Buckle BKE.
Apparel Sales Surging
The apparel market has been doing well for quite some time. In fact, the market started rebounding from its COVID-19 lows as people started getting vaccinated and the economy started reopening. This led to sales growth as people once again started buying new clothes.
According the latest report form the Commerce Department, clothing and accessories sales grew 0.5% in November on a month-over-month basis. On a year-over-year basis, sales grew a whopping 35.3%.
The year-over-year growth figures look massive and there are reasons behind it. Apparel sales had taken a major hit last year as travel bans, owing to the coronavirus scare, prevented people from traveling. Thus, vacationing had almost come to a standstill.
The jump in November could have been higher but holiday sales somewhat slowed down for the first time this year. This was primarily because people started shopping early this time around.
Holiday season typically starts from November, but this time, retailers started giving away deals as early as October. People too started flocking to stores earlier as they feared the supply chain crisis could pose a problem with deliveries during the peak of the pandemic.
Apparel Industry Poised to Grow
The apparel market started rebounding early this year. As the vaccination drive gathered pace, people went shopping for new clothes. According to the NPD Group, this year, the apparel market is on track to surpass the pre-pandemic sales level of 2019.
Apparels have generated $13.3 million more in sales in the first eight months this year than the same period in 2019 and the holiday season should drive sales further as more people plan and go on vacations.
According to a report from Retail Dive, spending on clothing and accessories by people between 57 and 75 years jumped 28% from the first half of 2019 this year. The report further says that this year baby boomers are likely to drive sales.
Interestingly, people are buying clothes despite surging prices, which means they are ready to shell out more. This definitely is going to aid the apparel industry.
Given this scenario, it would be prudent to invest in these four apparel stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Boot Barn Holdings, Inc. operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. BOOT’s products include boots, denim, western shirts, cowboy hats, belts and belt buckles, and western-style jewelry and accessories. Boot Barn sells its products through bootbarn.com, an e-commerce website.
Boot Barn Holdings’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 25.7% over the past 60 days. Shares of BOOT have gained 22.9% in the past three months. Boot Barn Holdings carries a Zacks Rank #1.
Tapestry, Inc. is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.
Tapestry reported stronger-than-expected first-quarter fiscal 2022 earnings, thanks to robust demand and strong customer engagement. TPR posted first-quarter adjusted earnings of 82 cents a share, beating the Zacks Consensus Estimate of 69 cents.
Tapestry’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 11.5% over the past 60 days. Shares of TPR have gained 2.1% in the past three months. Tapestry sports a Zacks Rank #1.
Tilly’s is a specialty retailer in the action sports industry selling clothing, shoes and accessories. TLYS distributes t-shirts, sweatshirts, jackets, shorts, pants, jeans, sweaters, swimwear, shoes and accessories for men, women and kids through its website. Tilly’s sells denim apparel and cologne for guys, boys and juniors and apparel, footwear and accessories for juniors and girls under RSQ, Full Tilt, Blue Crown and Infamous brand names.
Tilly’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 25.9% over the past 60 days. Shares of TLYS have gained 73.2% year to date. Tilly’s sports a Zacks Rank #1.
The Buckle is a leading retailer of medium to better-priced casual apparel, footwear, and accessories for fashion-conscious young men and women. BKE markets a wide selection of brand names and private label casual apparel, including denims, other casual bottoms, tops, sportswear, outerwear, accessories and footwear. Buckle emphasizes personalized attention to its customers and provides individual customer services such as free alterations, layaways, and a frequent shopper program.
Buckle’s expected earnings growth rate for the current year is 79%. The Zacks Consensus Estimate for current-year earnings has improved 12.4% over the past 60 days. Shares of BKE have gained 33.5% year to date. Buckle has a Zacks Rank #1.
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