The Zacks Textile – Apparel industry continues to grapple with persistent inflationary pressures and ongoing supply chain disruptions, which remain key challenges for several companies. In addition, rising SG&A expenses are weighing on profitability across the sector.

Despite these headwinds, leading players such as Lululemon Athletica Inc. (LULU Quick QuoteLULU - Free Report) , Ralph Lauren Corporation (RL Quick QuoteRL - Free Report) , Under Armour, Inc. (UAA Quick QuoteUAA - Free Report) , and Hanesbrands Inc. (HBI Quick QuoteHBI - Free Report) are well-positioned for long-term growth. Their strategic focus on enhancing digital and in-store operations and investing in brand-building initiatives continues to drive resilience and support performance in an evolving retail landscape.

About the Industry

The Zacks Textile - Apparel industry includes companies and lifestyle brands that manufacture, design, distribute, source, market and sell apparel, footwear, and accessories for men and women. These include fashion apparel like dresses, pants, skirts, shorts, shirts, jackets, blouses and knitwear, and intimate apparel like underwear and shapewear. The industry also comprises companies offering apparel for a healthy lifestyle and athletic activities, such as yoga, running and training. Some companies also deal with fitness-related accessories like gloves, bags, headwear and sports masks. The industry participants operate through direct-to-consumer (brick-and-mortar and online), wholesale and licensing distribution channels. Most players operate through stores and digital networks in the United States and internationally.

4 Trends Shaping the Future of the Textile - Apparel Industry

Tough Consumer Landscape: Textile-apparel companies are grappling with a challenging global retail environment shaped by dynamic macroeconomic conditions and heightened uncertainty. Persistent inflation and geopolitical instability have all contributed to rising costs and cautious consumer sentiment. As a result, consumers are increasingly cutting back on discretionary spending, focusing on essential goods and value-driven purchases. This shift in behavior is straining demand across the textile and apparel sector, as brands struggle to adapt to evolving priorities in a cost-conscious and unpredictable economic landscape.

Cost Concerns: Textile-apparel companies continue to face significant cost-related headwinds related to elevated input costs, which may affect their profitability. Higher selling, general, and administrative (SG&A) costs, stemming from increased marketing investments and enhancements to physical and digital retail channels, are concerning. Many firms are vulnerable to shipping disruptions, which can lead to delays and increased freight expenses, ultimately squeezing their overall profit margins. The competitive labor market adds another layer of difficulty, posing threats to the profitability of these companies. In addition, potential tariff impacts could increase costs for these players, adding further pressure on their financial performance.

Digital Transformation & Offline Retail Strategies: As consumers effortlessly move between physical and digital platforms, textile-apparel companies are improving customer experiences across all channels. These businesses are focusing on enhancing customer experiences across all touchpoints, prioritizing investments to improve in-store interactions and boost brick-and-mortar sales. At the same time, the convenience of online shopping is fueling significant growth in e-commerce, prompting brands to upgrade their digital platforms, improve mobile applications, modernize payment systems, and integrate both online and offline operations. To meet growing consumer demand, companies are expanding their order fulfillment capabilities and offering services like buy online, pick up in-store and curbside delivery. In addition, the integration of AI technologies is helping optimize customer experiences, improve inventory management and streamline operations, further driving efficiency and engagement.

Brand-Enhancing Strategies: Textile-apparel companies are gaining from initiatives aimed at strengthening their brands through diverse marketing strategies, licensing agreements, acquisitions and partnerships. Introducing new products plays a crucial role in their growth strategies, with ongoing product innovation being essential for staying competitive and meeting evolving consumer demands.

Zacks Industry Rank Indicates Dull Prospects

The Zacks Textile – Apparel industry is housed within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #208, which places it in the bottom 15% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative aggregate earnings outlook for its constituent companies. Since the beginning of April 2025, the industry’s consensus earnings estimate for the current financial year has declined 6.2%.

Let’s look at the industry’s performance and current valuation.

Industry vs. Broader Market

The Zacks Textile - Apparel industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 Composite year-to-date. 

The industry has declined 27.1% against the broader sector and the S&P 500’s growth of 5.2% and 0.8%, respectively.

YTD Price Performance

Industry's Current Valuation

On the basis of forward 12-month price-to-earnings (P/E), commonly used for valuing consumer discretionary stocks, the industry is currently trading at 11.12X compared with the S&P 500’s 21.74X and the sector’s 15.79X.

Over the past five years, the industry has traded as high as 29.97X and as low as 10.07X, with the median being 13.69X, as the chart shows.

Price-to-Earnings Ratio (Past 5 Years)

4 Must-Watch Textile - Apparel Stocks

lululemon: The yoga-inspired athletic apparel brand currently holds a Zacks Rank #3 (Hold). The company is actively executing its ambitious ‘Power of Three ×2’ growth strategy, which targets $12.5 billion in net revenue by 2026, doubling its 2021 performance. This long-term plan focuses on three core pillars — product innovation, enhancing customer experience, and expanding market reach. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A key component of this strategy is the expansion of Lululemon’s men’s category, with the goal of doubling men’s sales from 2021 levels. The company is also ramping up its e-commerce investments to meet rising online demand and provide a seamless digital shopping journey. In addition, lululemon continues to strengthen its in-store experience, integrating omnichannel features such as buy online, pick up in-store and ship-from-store to drive convenience and engagement across both digital and physical retail channels. The Zacks Consensus Estimate for lululemon’s current fiscal year earnings per share (EPS) has moved down by a couple of cents in the last seven days to $14.50. LULU stock has dropped 27.1% in the past year.

Price and Consensus: LULU

Ralph Lauren: The Zacks Rank #3 company, a global leader in premium lifestyle products, is progressing well under its strategic “Next Great Chapter: Accelerate Plan.” This initiative is designed to streamline the company’s global operations and boost its technological capabilities, paving the way for sustainable revenue and profit growth. The company is making significant strides in expanding its digital and omnichannel capabilities, with key investments in mobile, omnichannel integration and fulfillment solutions. Ralph Lauren's digital business, which includes directly operated websites, department store sites, pure-play e-commerce platforms and social commerce, has shown impressive growth. 

Looking forward, management is optimistic about sustaining business momentum and executing the long-term strategy, further elevating the brand and strengthening its market position. The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year EPS has moved up 0.4% in the past 30 days to $13.67. Shares of RL have rallied 43.6% year to date.

Price and Consensus: RL

Under Armour: The company is one of the leading designers, marketers, and distributors of authentic athletic footwear, apparel and accessories. The Zacks Rank #3 company is executing a focused growth strategy centered on retail investments, product innovation, and digital transformation to drive stronger sales performance and elevate brand equity. A key priority for Under Armour is deepening customer engagement by leveraging real-time data and analytics to enhance brand appeal and responsiveness. The company is also transforming its direct-to-consumer (DTC) channel into a premium brand destination, moving away from heavy discounting to prioritize full-price selling and elevate the overall shopping experience.

Under Armour’s ongoing restructuring efforts are delivering meaningful cost savings, positioning the brand for greater long-term operating efficiency and profitability. The Zacks Consensus Estimate for UAA’s current fiscal EPS has remained unchanged over the past 30 days at 34 cents. Shares of Under Armour have lost 1.4% year to date.

Price and Consensus: UAA

Hanesbrands: The company engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children. It currently carries a Zacks Rank #3. Hanesbrands continues to advance its strategic transformation amid a challenging macroeconomic and competitive landscape. The company is executing on initiatives focused on cost efficiency, supply-chain optimization and operational simplification to drive margin expansion and long-term profitability. Streamlining operations, reducing overhead and implementing modern technology platforms have strengthened its ability to adapt and perform. A consumer-centric strategy, anchored in innovation and brand investment, is supporting market share gains and deeper retail engagement.

Hanesbrands is enhancing its innovation pipeline with AI-driven analytics to improve demand forecasting, optimize inventory and refine personalized marketing strategies. The Zacks Consensus Estimate for HBI’s current financial-year EPS has remained unchanged in the past 30 days at 53 cents. Shares of Hanesbrands have plunged 14.3% year to date.

Price and Consensus: HBI