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Freshen Up Your Wardrobe This Holiday Season: 4 Apparel Picks

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Undeniably, coronavirus-induced temporary store closures and soft consumer demand impacted the Retail - Apparel And Shoes industry. With the pandemic taking a toll on employment and household income, consumers were left with no option but to curtail discretionary spending. Nonetheless, measures undertaken to support households coupled with the resumption of economic activities post the coronavirus lockdown have acted as tailwinds for the industry.

Per the Commerce Department, sales at clothing & clothing accessories stores grew 2.9% sequentially during the month of August. This followed an increase of 2.2% in July. An uptick in sales is good news for retailers ahead of the holiday season, which is a make or break time. Evidently, industry players need to address any logistical or inventory issues and roll out strategies to provide a seamless shopping experience, whether offline or online.

As companies brace for an unusual festive season, they have been directing resources toward digital platforms, accelerating fleet optimization and augmenting supply chain. Industry participants have been focusing on superior product strategy, advancement of omni-channel capabilities and making prudent capital investments to resonate well with consumer demand and behavior in the new normal.

According to a report from CNBC, Deloitte envisions holiday sales between $1.147 trillion and $1.152 trillion, which suggests an increase of 1-1.5% during the November-January period. Markedly, e-commerce sales are estimated to improve 25-35% to reach $182-$196 billion this festive period.

Well, if you wish to freshen up your wardrobe this festive period, we suggest four stocks from the Retail - Apparel And Shoes space. Notably, the industry currently carries a Zacks Industry Rank #125, which places it in the top 50% of more than 250 Zacks industries. While the stocks in this industry have collectively advanced 60.7% in the past six months, the S&P 500 Index and Retail – Wholesale Sector have rallied 22.6% and 42.8%, respectively.

4 Prominent Picks

Zumiez Inc. (ZUMZ - Free Report) is worth betting on. This specialty retailer of apparel, footwear, accessories has a trailing four-quarter earnings surprise of 41.2%, on average. Also, the Zacks Consensus Estimate for its current-fiscal EPS has increased 59.9% in the past 60 days. Shares of this Zacks Rank #1 (Strong Buy) company have advanced 36.7% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has been making every effort to expand its e-commerce and omni-channel platforms to provide consumers with the facility of quick and easy access to products and brands. In this regard, Zumiez has considerably enhanced customers’ experience by integrating its physical and digital networks. This enables customers to access inventories through all channels alongside availing facilities like buy online, pick up in store and reserve online and pay in store.

You may invest in Tapestry, Inc. (TPR - Free Report) , which sports a Zacks Rank #1. The provider of luxury accessories and branded lifestyle products registered positive earnings surprise in the last-reported quarter. Also, the Zacks Consensus Estimate for its current-fiscal EPS has moved up by 17.7% in the past 60 days. The company has an estimated long-term earnings growth rate of 9.3%. We also note that shares of the company have improved 12.4% in the past six months.

The company is poised to benefit from its Acceleration Program, which is aimed at transforming it into a leaner and more responsive organization, and building significant data and analytics capabilities with focus on enhancing digital and omnichannel capabilities.

We also suggest investing in Vera Bradley, Inc. (VRA - Free Report) . Markedly, shares of this Zacks Rank #1 company have surged 42.3% in the past six months. Also, the Zacks Consensus Estimate for its current-fiscal EPS has increased to 73 cents from 22 cents 60 days ago. Impressively, this designer, manufacturer and seller of women's handbags, luggage and travel items, fashion and home accessories, and gifts registered positive earnings surprise in the last-reported quarter.

This Indiana-based company has been benefiting from customers’ favorable response toward product launches and marketing initiatives, and cotton masks. Moreover, effective inventory management, cost containment and tightly-controlled promotional activity have been driving margins.

Investors can count on Sportsman's Warehouse Holdings, Inc. (SPWH - Free Report) , an outdoor sporting goods retailer. Markedly, shares of this Zacks Rank #1 company have more than doubled in the past six months. Also, the Zacks Consensus Estimate for its current-fiscal EPS has risen 91.4% in the past 60 days. Notably, the company has a trailing four-quarter earnings surprise of 64.8%, on average.

The company is gaining from rise in outdoor activities, such as fishing, hunting, camping and hiking. Management believes that the addition of participants in outdoor activities bodes well for outdoor specialty retail in general and Sportsman's Warehouse in particular.

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