Clothing sales rebound to pre-pandemic levels: 4 picks – March 1, 2022
The US apparel market is rapidly recovering after suffering for months during the pandemic. While the entire retail sector is enjoying a slow recovery, apparel sales have recovered to pre-pandemic levels, indicating the industry is back on track as the economy continue to reopen.
Although the holiday season hasn’t been all that impressive for retailers this time around, the year seems to have started well, with apparel sales hitting new highs. This has helped actions like Boot Barn Holdings, Inc. (STARTUP – free report), Tapestry, Inc. (TRP – Free report) Capri Holdings (IRCP – free report) and Designer brands (DBI – free report).
Clothing sales rebound
After months of struggle, clothing sales finally started to pick up last year when the economy began to reopen. This year seems to have started as retailers would have liked, with apparel sales hitting a new high. According to the Mastercard SpendingPulse report, apparel sales increased 37.6% in January year-over-year, recording the strongest growth in SpendingPulse history.
According to the report, apparel sales have now recorded growth for 11 consecutive months, indicating that the hit it suffered during the pandemic is now almost over.
Additionally, the National Retail Federation (NRF) said in a separate report that apparel sales rose 0.7% month over month in January and an unadjusted 19.1% on a yearly basis. . The good news is that not only clothing, but also retail sales rose, with sales rising 4.7% in January. This indicates that the sector as a whole is on the right track to recover.
Clothing sales are expected to increase
One of the main reasons for the jump is that people want to revamp their wardrobes after cutting back on clothing purchases in 2020. As the economy has started to reopen and restrictions have started to ease, people have started to leave their homes and are now traveling more often and planning vacations.
This again gave rise to demand for clothing and accessories, giving sales the much-needed boost.
Apparel is poised to grow this year as the economy reopens further. According to the NPD Group, the apparel market is on track to surpass pre-pandemic 2019 sales levels this year.
Also, despite rising prices, people are willing to spend, which is a good sign for the apparel industry. According to the latest Commerce Department report, personal spending rose 2.1% in February despite personal income remaining virtually unchanged from January. It means people are willing to shell out more.
Given this scenario, it would be prudent to invest in these four apparel stocks. Each of the stocks carries a Zacks rank of No. 1 (Strong Buy) or 2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and around the world. TPR offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal clothing collections, sunglasses, travel bags, fragrances and watches. .
Tapestry reported stronger-than-expected results for the first quarter of fiscal 2022, driven by robust demand and strong customer engagement. TPR posted first-quarter adjusted earnings of 82 cents per share, beating Zacks’ consensus estimate of 69 cents.
Tapestry’s forecast earnings growth rate for the current year is 22.9%. The Zacks consensus estimate for current-year earnings has improved 4.3% over the past 60 days. Shares of TPR have gained 1.9% over the past three months. Tapestry wears a No. 2 Zacks rank.
Operation of the starter barn is a chain of lifestyle stores devoted to western and work-related footwear, clothing and accessories. BOOT’s products include boots, jeans, western shirts, cowboy hats, belts and belt buckles, as well as western-style jewelry and accessories. Boot Barn sells its products through bootbarn.com, an e-commerce website.
Boot Barn Holdings’ forecast earnings growth rate for the current year is over 100%. The Zacks consensus estimate for current-year earnings has improved 11.5% over the past 60 days. Boot Barn Holdings carries a Zacks rank #1.
Capri Holdings provides women’s and men’s accessories, footwear and ready-to-wear, as well as wearable technology, watches, jewelry, eyewear and a full line of fragrance products. CPRI operates in the global personal luxury goods industry, which has been severely impacted by the coronavirus outbreak. Capri Holdings has strengthened its position in the luxury fashion space and seeks to maximize the potential of the Versace, Jimmy Choo and Michael Kors brands through expanded products and categories.
Capri Holdings’ expected earnings growth rate for the current year is over 100%. The Zacks consensus estimate for current-year earnings has improved 12.4% over the past 60 days. CPRI shares have gained 14.4% over the past three months. Capri wears a Zacks rank #1.
Designer brands designs, produces and sells shoes and accessories. DBI offers shoes, boots, sandals, sneakers, socks, handbags and accessories. The Designer Brands operating segment includes the DSW segment, which includes DSW and dsw.com stores and the Affiliated Business Group segment.
Designer Brands’ forecast earnings growth rate for the current year is over 100%. The Zacks consensus estimate for current-year earnings has improved 0.60% over the past 60 days. DBI wears a No. 1 Zacks rank.