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3 Apparel Stocks in Focus That Returned 30% or More in 2018
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“Survival of the fittest” is the mantra for the Zacks Textile-Apparel industry, as adaptation, productivity, flexibility and innovation are its lifeblood. In order to stay ahead of competition and cement its position in the market, a company needs to cater to the ever-changing consumer taste and preference with new designs in clothing.
The industry comprises lifestyle brands, engaged in designing, manufacturing, marketing and distributing fashion and basic apparel, footwear and accessories in the United States and international markets. The industry also houses providers of athleticwear and related equipment and fitness accessories. Most of the textile apparel players operate via stores and digital networks.
So far this year, the industry has witnessed a rise of 4%, with many companies in the space putting up a stellar show, buoyed by favorable economic indicators and strategic growth endeavors.
The industry has significantly outperformed the sector’s decline of 7.2% as well as the S&P 500’s fall of 0.9%. The industry, which forms part of the Consumer Discretionary sector, is currently among the top 14% (36 of 257) of all Zacks industries.
Additionally, an 18-year high consumer confidence, steady labor market, gradual wage acceleration and higher business investments are working in favor of the industry. Rise in disposable income is further acting as a catalyst, thus lifting consumers’ spending appetite and resulting in higher demand for luxury items, including premium apparel, accessories and others.
Further, enhanced investment in the digital realm is another factor driving growth for most textile-apparel companies. Improved payment systems, buy online and pick up at store facility, advanced e-commerce sites and effective mobile apps are some of the efforts taken by these companies to grab customers’ attention. While costs associated with such investments and stiff competition might keep margins under pressure in the near term, the companies are working on cost control. Incidentally, players are executing stringent measures like streamlining operations, optimizing portfolio and closing down underperforming stores.
Moreover, improved global reach provides the industry with a solid business foundation and enables it to seek growth opportunities. However, risks related to volatile currency fluctuations and potential tariff impacts are concerns.
Here are the 3 Prominent Picks
Here, we discuss three Textile-Apparel stocks that returned more than 30% in this year and carries a Zacks Rank #1 (Strong Buy) and 2 (Buy). Also, these companies have an impressive surprise history and long-term expected earnings growth rate. Moreover, the future plans outlined by these companies suggest that there is more room for the stocks to run.
Topping the list is Crocs, Inc. (CROX - Free Report) , which reported the third consecutive earnings beat and seventh straight positive sales surprise in third-quarter 2018. Additionally, shares of this Niwot, CO-based company have skyrocketed 100.9% in this year. The company’s long-term earnings growth rate of 15% also highlights its growth potential. Currently, Crocs sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lululemon Athletica Inc. (LULU - Free Report) has been riding high on progress pertaining to its strategy for 2020, and stringent focus on digital and international growth. Moreover, the company is gaining from broad-based growth across all categories, channels and geographies. Management expects the solid momentum to continue in fiscal 2018 as well, as evident from its raised guidance for the year. In third-quarter fiscal 2018, lululemon reported the seventh consecutive earnings beat and 12th straight positive sales surprise. The company has a trailing four-quarter average positive earnings surprise of 19.5%. Additionally, share price of this yoga-inspired athletic apparel company has increased almost 53% in 2018. The company’s long-term earnings growth rate of 19.3% also highlights its growth potential. Currently, lululemon carries a Zacks Rank #2.
Under Armour, Inc.’s (UAA - Free Report) sustained focus on brand development and expansion of direct-to-customer and technology-based fitness businesses bode well for the stock. Apart from rolling out e-commerce platforms, the company continues to look for opportunities to expand footprint. Under Armour reported the fourth consecutive quarter of top-line beat in third-quarter 2018. Also, the company has a trailing four-quarter average positive earnings surprise of 27.1%. This Zacks Rank #2 stock has soared 30% in so far this year. Further, Under Armour has a long-term earnings growth rate of 20.5%.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
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3 Apparel Stocks in Focus That Returned 30% or More in 2018
“Survival of the fittest” is the mantra for the Zacks Textile-Apparel industry, as adaptation, productivity, flexibility and innovation are its lifeblood. In order to stay ahead of competition and cement its position in the market, a company needs to cater to the ever-changing consumer taste and preference with new designs in clothing.
The industry comprises lifestyle brands, engaged in designing, manufacturing, marketing and distributing fashion and basic apparel, footwear and accessories in the United States and international markets. The industry also houses providers of athleticwear and related equipment and fitness accessories. Most of the textile apparel players operate via stores and digital networks.
So far this year, the industry has witnessed a rise of 4%, with many companies in the space putting up a stellar show, buoyed by favorable economic indicators and strategic growth endeavors.
The industry has significantly outperformed the sector’s decline of 7.2% as well as the S&P 500’s fall of 0.9%. The industry, which forms part of the Consumer Discretionary sector, is currently among the top 14% (36 of 257) of all Zacks industries.
Additionally, an 18-year high consumer confidence, steady labor market, gradual wage acceleration and higher business investments are working in favor of the industry. Rise in disposable income is further acting as a catalyst, thus lifting consumers’ spending appetite and resulting in higher demand for luxury items, including premium apparel, accessories and others.
Further, enhanced investment in the digital realm is another factor driving growth for most textile-apparel companies. Improved payment systems, buy online and pick up at store facility, advanced e-commerce sites and effective mobile apps are some of the efforts taken by these companies to grab customers’ attention. While costs associated with such investments and stiff competition might keep margins under pressure in the near term, the companies are working on cost control. Incidentally, players are executing stringent measures like streamlining operations, optimizing portfolio and closing down underperforming stores.
Moreover, improved global reach provides the industry with a solid business foundation and enables it to seek growth opportunities. However, risks related to volatile currency fluctuations and potential tariff impacts are concerns.
Here are the 3 Prominent Picks
Here, we discuss three Textile-Apparel stocks that returned more than 30% in this year and carries a Zacks Rank #1 (Strong Buy) and 2 (Buy). Also, these companies have an impressive surprise history and long-term expected earnings growth rate. Moreover, the future plans outlined by these companies suggest that there is more room for the stocks to run.
Topping the list is Crocs, Inc. (CROX - Free Report) , which reported the third consecutive earnings beat and seventh straight positive sales surprise in third-quarter 2018. Additionally, shares of this Niwot, CO-based company have skyrocketed 100.9% in this year. The company’s long-term earnings growth rate of 15% also highlights its growth potential. Currently, Crocs sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lululemon Athletica Inc. (LULU - Free Report) has been riding high on progress pertaining to its strategy for 2020, and stringent focus on digital and international growth. Moreover, the company is gaining from broad-based growth across all categories, channels and geographies. Management expects the solid momentum to continue in fiscal 2018 as well, as evident from its raised guidance for the year. In third-quarter fiscal 2018, lululemon reported the seventh consecutive earnings beat and 12th straight positive sales surprise. The company has a trailing four-quarter average positive earnings surprise of 19.5%. Additionally, share price of this yoga-inspired athletic apparel company has increased almost 53% in 2018. The company’s long-term earnings growth rate of 19.3% also highlights its growth potential. Currently, lululemon carries a Zacks Rank #2.
Under Armour, Inc.’s (UAA - Free Report) sustained focus on brand development and expansion of direct-to-customer and technology-based fitness businesses bode well for the stock. Apart from rolling out e-commerce platforms, the company continues to look for opportunities to expand footprint. Under Armour reported the fourth consecutive quarter of top-line beat in third-quarter 2018. Also, the company has a trailing four-quarter average positive earnings surprise of 27.1%. This Zacks Rank #2 stock has soared 30% in so far this year. Further, Under Armour has a long-term earnings growth rate of 20.5%.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>