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5 Apparel Stocks to Buy for the Upcoming Holiday Season

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The holiday season is around the corner and retailers expect sales to bounce back after last year’s lull. The apparel market is expected to be one of the big beneficiaries this holiday season after the economic reopening.

With travel once again picking up and thousands expected to travel this holiday season, the apparel market is expected to get a boost. That said, despite retail sales slowing down for the past few months, apparel sales have been on a high and are expected to exceed the pre-pandemic levels this year.

November to be Big for Apparel Market

The clothing market is doing well after a not-so-memorable 2020, with the economy reopening and people stepping out of their homes. The holiday season should perk up sales as more people have started traveling too. According to Rakuten Intelligence, November will be the best month for apparel sales and e-commerce.

According to the study, people will be spending big on fall and winter clothes, boosting category sales by 30% this November. Another reason for a pickup in sales this year will be stock clearance. Inventory that didn’t sell last year will be incentivized by companies for sale this year.

However, with fears of coronavirus far from over, e-commerce will continue to drive the majority of the sales this year too.

Apparel Sales on Growth Track

Last year, the apparel market put up almost a no-show, as people spent more on essential goods and cut down on clothes as tourist destinations remained closed. According to a recent survey by Sezzle, more than 75% of consumers are now spending more on apparel, fashion products and shoes than any other category.

Per an NPD Group report, the U.S. apparel market is not only on track for a recovery but also will exceed the pre-pandemic levels by the end of this year. According to the report, apparel retailers have already recorded over $13.3 million more in sales in the first eight months of this year compared to the same period of 2019.

These gains came despite a surge in cases of the Delta variant. This means that people are a lot more confident now to step outside their home, party and holiday after taking the COVID-19 vaccine.

Our Choices

Given this scenario, it would be prudent to invest in these five apparel stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Buckle, Inc. The (BKE - Free Report) is a leading retailer of medium to better-priced casual apparel, footwear, and accessories for fashion-conscious young men and women.

The company’s expected earnings growth rate for the current year is 59.4%. The Zacks Consensus Estimate for current-year earnings improved 13.1% over the past 60 days. 

Citi Trends, Inc. (CTRN - Free Report) is a value-priced retailer of urban fashion apparel and accessories for the entire family.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved 30% over the past 60 days. 

Hibbett Sports, Inc. (HIBB - Free Report)  typically caters to small counties with a population ranging from 25,000-75,000. Its merchandise assortment is focused on footwear, athletic equipment and apparel.

The company’s expected earnings growth rate for next year is 84.6%. The Zacks Consensus Estimate for current-year earnings improved 26.3% over the past 60 days. 

Tapestry, Inc. (TPR - Free Report) is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The company offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches.

The company’s expected earnings growth rate for the current year is 12.5%. The Zacks Consensus Estimate for current-year earnings improved 8.8% over the past 60 days. 

The Gap, Inc. (GPS - Free Report) is a premier international specialty retailer, offering a diverse range of clothing, accessories and personal care products. It offers products for men, women and children under the Old Navy, Gap, Banana Republic, Athleta, Intermix and Hill City brands.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings improved 24.2% over the past 60 days.

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