We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why You Should Avoid These 3 Apparel Stocks in 2017
Read MoreHide Full Article
The apparel industry continues to grapple with issues like competition from online sales and declining footfall. These companies are under pressure to strike the right chord with the fashion-conscious consumers as “change is the only constant” for this industry.
The year 2016 has not been very favorable for apparel retailers. With more and more consumers resorting to online shopping, the brick and mortar stores are witnessing a decline in footfall. This has dealt a major blow to apparel retailers who are dependent on mall traffic to drive growth. Online retail giant Amazon.com Inc. (AMZN - Free Report) clinched most of the market share. According to data from NPD Group Consumer Tracking Service, U.S. apparel retail sales increased only 3%, while online sales jumped 12%, both on a year-over-year basis. Moreover, factors like the shift in the preference of millennials from clothes to technology and home improvement, unusually warm weather conditions and the strengthening of the U.S. dollar have added to the woes of these companies. Moreover, macroeconomic uncertainties like Brexit, the unexpected outcome of the U.S. Presidential elections, and persistent decline in gasoline prices which were the main concerns in 2016 have also hurt the sector.
It might be prudent to fine tune your portfolio and dispose of stocks that may hurt your returns before you ring in the new year.
Here we have zeroed in on three textile apparel stocks that have a VGM score of ‘F’, carry a Zacks Rank #4 (Sell) or 5 (Strong Sell) and have witnessed price decline over the last one month. Further these stocks have underperformed the Zacks categorized Consumer Discretionary sector in the last three months.
Columbia Sportswear Company (COLM - Free Report) , a manufacturer of active outdoor apparel and footwear, carries a Zacks Rank #4 and a VGM Score of ‘F’. The stock has declined 1% in the last one month and has gained only 1% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector that gained 5%. The estimates for 2016 and 2017 have declined 1.9% and 2%, respectively, over the past 90 days. Currency headwinds, soft sales in the U.S. and Canada along with a lackluster performance of the Columbia brand are plaguing the company at the moment.
Differential Brands Group Inc. is a U.S.-based casual apparel retailer. It has a VGM Score of ‘F’ and carries a Zacks Rank #4. The company posted a negative surprise of 20% in the third quarter of 2016. Estimates for 2016 widened from a loss of 5 cents to a loss of 30 cents and that for 2017 plunged 66.7% over the past 60 days. The stock declined 15% over the past one month and 54.5% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector that gained 5%.
Vince Holding Corp. (VNCE - Free Report) , which offers a broad range of women's and men's ready-to-wear garments, carries a Zacks Rank #5 and a VGM Score of ‘F’. Earnings estimates for 2016 are expected to decline over 100% year over year. The stock has slipped approximately 6% in the last one month and has plunged 25.5% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector.
Bottom Line
Stocks that yield low returns and depreciate in value can be detrimental to your portfolio, especially in a volatile market. Hence, we advise investors to switch over to Consumer Discretionary stocks with better fundamentals and prospects and a favorable Zacks Rank
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why You Should Avoid These 3 Apparel Stocks in 2017
The apparel industry continues to grapple with issues like competition from online sales and declining footfall. These companies are under pressure to strike the right chord with the fashion-conscious consumers as “change is the only constant” for this industry.
The year 2016 has not been very favorable for apparel retailers. With more and more consumers resorting to online shopping, the brick and mortar stores are witnessing a decline in footfall. This has dealt a major blow to apparel retailers who are dependent on mall traffic to drive growth. Online retail giant Amazon.com Inc. (AMZN - Free Report) clinched most of the market share. According to data from NPD Group Consumer Tracking Service, U.S. apparel retail sales increased only 3%, while online sales jumped 12%, both on a year-over-year basis. Moreover, factors like the shift in the preference of millennials from clothes to technology and home improvement, unusually warm weather conditions and the strengthening of the U.S. dollar have added to the woes of these companies. Moreover, macroeconomic uncertainties like Brexit, the unexpected outcome of the U.S. Presidential elections, and persistent decline in gasoline prices which were the main concerns in 2016 have also hurt the sector.
It might be prudent to fine tune your portfolio and dispose of stocks that may hurt your returns before you ring in the new year.
Here we have zeroed in on three textile apparel stocks that have a VGM score of ‘F’, carry a Zacks Rank #4 (Sell) or 5 (Strong Sell) and have witnessed price decline over the last one month. Further these stocks have underperformed the Zacks categorized Consumer Discretionary sector in the last three months.
Columbia Sportswear Company (COLM - Free Report) , a manufacturer of active outdoor apparel and footwear, carries a Zacks Rank #4 and a VGM Score of ‘F’. The stock has declined 1% in the last one month and has gained only 1% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector that gained 5%. The estimates for 2016 and 2017 have declined 1.9% and 2%, respectively, over the past 90 days. Currency headwinds, soft sales in the U.S. and Canada along with a lackluster performance of the Columbia brand are plaguing the company at the moment.
Differential Brands Group Inc. is a U.S.-based casual apparel retailer. It has a VGM Score of ‘F’ and carries a Zacks Rank #4. The company posted a negative surprise of 20% in the third quarter of 2016. Estimates for 2016 widened from a loss of 5 cents to a loss of 30 cents and that for 2017 plunged 66.7% over the past 60 days. The stock declined 15% over the past one month and 54.5% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector that gained 5%.
Vince Holding Corp. (VNCE - Free Report) , which offers a broad range of women's and men's ready-to-wear garments, carries a Zacks Rank #5 and a VGM Score of ‘F’. Earnings estimates for 2016 are expected to decline over 100% year over year. The stock has slipped approximately 6% in the last one month and has plunged 25.5% over the last three months, underperforming the Zacks categorized Consumer Discretionary sector.
Bottom Line
Stocks that yield low returns and depreciate in value can be detrimental to your portfolio, especially in a volatile market. Hence, we advise investors to switch over to Consumer Discretionary stocks with better fundamentals and prospects and a favorable Zacks Rank
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buy" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 "Strong Sells" and other private research. See the stocks free >>