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Apparel Stocks' Earnings Roster for Jul 30: HBI, COLM & More
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The earnings season is back and results of the textile-apparel companies are likely to reflect shortcomings from the rapid spread of coronavirus. Revenues of these companies are likely to bear the brunt of temporary store closures and manufacturing facility shutdowns, which were implemented in mid-March and persisted through most parts of April, especially in North America. Apart from this, supply-chain disruptions due to temporary shutdowns of raw-material providers have been a hurdle for some apparel players.
Though stores started reopening gradually in some Asian countries toward the end of April and the United States in May, they were initially working for limited hours with traffic below pre-pandemic levels. Further, the second wave of the virus has kept customers confined to their homes, who prefer to step out only for essentials.
Nonetheless, companies in the apparel space have been benefiting from their efforts to boost online operations, as customers have increasingly resorted to this mode of shopping amid the pandemic. This is likely to have offered some cushion to their performance in the to-be-reported quarter. Also, some apparel players started producing face masks to meet commercial and consumer demand, while some are making medical gowns for the healthcare sector. Apart from this, companies have been undertaking measures to save discretionary costs and efforts to preserve cash flow amid the pandemic.
That being said, we cannot overlook margin pressure from additional costs associated with operating amid COVID-19, along with heightened promotional activity. Apart from this, several textile-apparel companies have been reeling under volatile currency movements due to their large overseas exposure. So let’s take a sneak peek into four textile-apparel stocks, which form part of the broader Consumer Discretionary sector and are slated to report second-quarter 2020 financial results on Jul 30. Per the latest Earnings Preview, total earnings of the Zacks Consumer Discretionary sector are expected to be down significantly for the quarter under review, with revenues likely to decline 29.4%.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Is a Beat in Store for Hanesbrands?
COVID-19-induced store closures are likely to have marred Hanesbrands Inc.’s (HBI - Free Report) performance in the second quarter. Apart from this, the company has been battling soft sales in the Innerwear segment for quite some time. Moreover, risks of adverse foreign currency movements cannot be ignored. Nevertheless, the company has been undertaking several measures to stay afloat amid the coronavirus outbreak. In this regard, Hanesbrands is producing cloth face coverings and medical gowns for the U.S. government amid the pandemic. Further, the company has been gaining from a solid online business. Also, its cost-saving efforts amid the COVID-19 crisis are likely to have contributed to performance in the to-be-reported quarter.
Our proven model predicts an earnings beat for Hanesbrands this season. The company has a Zacks Rank #3 and an Earnings ESP of +120.00%. (Read More: Here's How Hanesbrands Looks Ahead of Q2 Earnings)
Columbia Sportswear Company (COLM - Free Report) , like most apparel companies, resorted to temporary store closures amid the pandemic-led restrictions. In its first-quarter earnings release, management said that as of Apr 30, 2020, most of the stores had reopened in China and Korea, though many are operational for limited hours. Retail traffic is improving in these regions but still well below the pre-coronavirus level. Incidentally, management expected second-quarter net sales and operating loss to be significantly marred by the pandemic.
Columbia Sportswear Company Price and EPS Surprise
Apart from this, Columbia Sportswear has been grappling with high SG&A expenses. Nonetheless, the company is on track with its Experience First initiative or the X1 initiative, which is aimed at enhancing e-commerce operations to keep pace with the evolving consumer environment.
Our proven model does not conclusively predict an earnings beat for Columbia Sportswear this season. The company has a Zacks Rank #3 and an Earnings ESP of -1.78%. (Read More: What's in Store for Columbia Sportswear's Q2 Earnings?)
What’s in the Cards for Crocs?
Crocs, Inc. (CROX - Free Report) is likely to report a decline in both top and bottom lines for the second quarter. The Zacks Consensus Estimate for revenues is pegged at $240.7 million, indicating a drop of 32.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for quarterly earnings has been stable in the past 30 days at 12 cents. However, this suggests a deterioration of 78.2% from the figure reported in the year-ago period. In the last reported quarter, the company delivered a negative earnings surprise of 33.3%, though it outperformed the consensus mark in the preceding three quarters. This footwear and accessories provider has a trailing four-quarter earnings surprise of 10.1%, on average.
Our proven model does not conclusively predict an earnings beat for Crocs this season. The company has a Zacks Rank #2 and an Earnings ESP of 0.00%.
What’s in the Offing for Gildan Activewear?
Gildan Activewear Inc.’s (GIL - Free Report) second-quarter results are likely to reflect a year-over-year decline in both top and bottom lines. The Zacks Consensus Estimate for revenues is pegged at $257.4 million, indicating a decline of 67.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for the second-quarter loss has widened by a cent to 22 cents over the past 30 days. This suggests a considerable deterioration from earnings of 57 cents reported in the year-ago period. In the last reported quarter, Gildan Activewear delivered a negative earnings surprise of 40%. This apparel products company has a trailing four-quarter negative earnings surprise of 9.1%, on average.
Our proven model does not conclusively predict an earnings beat for Gildan Activewear this season. The company has a Zacks Rank #3 and an Earnings ESP of -51.72%.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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Apparel Stocks' Earnings Roster for Jul 30: HBI, COLM & More
The earnings season is back and results of the textile-apparel companies are likely to reflect shortcomings from the rapid spread of coronavirus. Revenues of these companies are likely to bear the brunt of temporary store closures and manufacturing facility shutdowns, which were implemented in mid-March and persisted through most parts of April, especially in North America. Apart from this, supply-chain disruptions due to temporary shutdowns of raw-material providers have been a hurdle for some apparel players.
Though stores started reopening gradually in some Asian countries toward the end of April and the United States in May, they were initially working for limited hours with traffic below pre-pandemic levels. Further, the second wave of the virus has kept customers confined to their homes, who prefer to step out only for essentials.
Nonetheless, companies in the apparel space have been benefiting from their efforts to boost online operations, as customers have increasingly resorted to this mode of shopping amid the pandemic. This is likely to have offered some cushion to their performance in the to-be-reported quarter. Also, some apparel players started producing face masks to meet commercial and consumer demand, while some are making medical gowns for the healthcare sector. Apart from this, companies have been undertaking measures to save discretionary costs and efforts to preserve cash flow amid the pandemic.
That being said, we cannot overlook margin pressure from additional costs associated with operating amid COVID-19, along with heightened promotional activity. Apart from this, several textile-apparel companies have been reeling under volatile currency movements due to their large overseas exposure. So let’s take a sneak peek into four textile-apparel stocks, which form part of the broader Consumer Discretionary sector and are slated to report second-quarter 2020 financial results on Jul 30. Per the latest Earnings Preview, total earnings of the Zacks Consumer Discretionary sector are expected to be down significantly for the quarter under review, with revenues likely to decline 29.4%.
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Is a Beat in Store for Hanesbrands?
COVID-19-induced store closures are likely to have marred Hanesbrands Inc.’s (HBI - Free Report) performance in the second quarter. Apart from this, the company has been battling soft sales in the Innerwear segment for quite some time. Moreover, risks of adverse foreign currency movements cannot be ignored. Nevertheless, the company has been undertaking several measures to stay afloat amid the coronavirus outbreak. In this regard, Hanesbrands is producing cloth face coverings and medical gowns for the U.S. government amid the pandemic. Further, the company has been gaining from a solid online business. Also, its cost-saving efforts amid the COVID-19 crisis are likely to have contributed to performance in the to-be-reported quarter.
Hanesbrands Inc. Price and EPS Surprise
Hanesbrands Inc. price-eps-surprise | Hanesbrands Inc. Quote
Our proven model predicts an earnings beat for Hanesbrands this season. The company has a Zacks Rank #3 and an Earnings ESP of +120.00%. (Read More: Here's How Hanesbrands Looks Ahead of Q2 Earnings)
You can see the complete list of today’s Zacks #1 Rank stocks here.
Here’s How Columbia Sportswear is Placed
Columbia Sportswear Company (COLM - Free Report) , like most apparel companies, resorted to temporary store closures amid the pandemic-led restrictions. In its first-quarter earnings release, management said that as of Apr 30, 2020, most of the stores had reopened in China and Korea, though many are operational for limited hours. Retail traffic is improving in these regions but still well below the pre-coronavirus level. Incidentally, management expected second-quarter net sales and operating loss to be significantly marred by the pandemic.
Columbia Sportswear Company Price and EPS Surprise
Columbia Sportswear Company price-eps-surprise | Columbia Sportswear Company Quote
Apart from this, Columbia Sportswear has been grappling with high SG&A expenses. Nonetheless, the company is on track with its Experience First initiative or the X1 initiative, which is aimed at enhancing e-commerce operations to keep pace with the evolving consumer environment.
Our proven model does not conclusively predict an earnings beat for Columbia Sportswear this season. The company has a Zacks Rank #3 and an Earnings ESP of -1.78%. (Read More: What's in Store for Columbia Sportswear's Q2 Earnings?)
What’s in the Cards for Crocs?
Crocs, Inc. (CROX - Free Report) is likely to report a decline in both top and bottom lines for the second quarter. The Zacks Consensus Estimate for revenues is pegged at $240.7 million, indicating a drop of 32.9% from the prior-year quarter’s reported figure.
Crocs, Inc. Price and EPS Surprise
Crocs, Inc. price-eps-surprise | Crocs, Inc. Quote
The Zacks Consensus Estimate for quarterly earnings has been stable in the past 30 days at 12 cents. However, this suggests a deterioration of 78.2% from the figure reported in the year-ago period. In the last reported quarter, the company delivered a negative earnings surprise of 33.3%, though it outperformed the consensus mark in the preceding three quarters. This footwear and accessories provider has a trailing four-quarter earnings surprise of 10.1%, on average.
Our proven model does not conclusively predict an earnings beat for Crocs this season. The company has a Zacks Rank #2 and an Earnings ESP of 0.00%.
What’s in the Offing for Gildan Activewear?
Gildan Activewear Inc.’s (GIL - Free Report) second-quarter results are likely to reflect a year-over-year decline in both top and bottom lines. The Zacks Consensus Estimate for revenues is pegged at $257.4 million, indicating a decline of 67.9% from the prior-year quarter’s reported figure.
Gildan Activewear, Inc. Price and EPS Surprise
Gildan Activewear, Inc. price-eps-surprise | Gildan Activewear, Inc. Quote
The Zacks Consensus Estimate for the second-quarter loss has widened by a cent to 22 cents over the past 30 days. This suggests a considerable deterioration from earnings of 57 cents reported in the year-ago period. In the last reported quarter, Gildan Activewear delivered a negative earnings surprise of 40%. This apparel products company has a trailing four-quarter negative earnings surprise of 9.1%, on average.
Our proven model does not conclusively predict an earnings beat for Gildan Activewear this season. The company has a Zacks Rank #3 and an Earnings ESP of -51.72%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained an impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>