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4 Apparel Stocks Set to Dazzle This Holiday Season

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The holiday season is around the corner and predictions are that travel and vacationing will see a massive jump. This would lead to a rise in holiday retail sales. Given that vacationing will be back after 2019, apparel sales are likely to get a boost.

Apparel sales are on the rise with the economy reopening. People have started socializing following the massive vaccination drive. The holiday season will thus drive the market further as people will buy new clothes for gifting and personal use.

November to be Big for Apparel Market

A study by Rakuten Intelligence predicts that apparel sales are likely to jump 30% year over year in the fourth quarter. This will mainly be because people will tend to spend more on winter and fall apparel.

Of the three months, November is projected to witness maximum sales. Sales will be driven mainly by e-commerce.

A separate report from NPD Group predicts a surge in apparel sales during the holiday season. Per the report, 61% of the respondents said they need a wardrobe revamp as their clothes are worn out. This will lead them to shop more.

The survey also found out that men are purchasing t-shirts and stand-alone items faster rate and sales are up 47% year over year. Shapewear for women has been one of the best-selling categories this year. The categories are likely to change as people start holidaying.

Apparel Market on Growth Track

People didn’t buy clothes for the purpose of vacationing last year, and so far this year, they have been buying clothes for home. According to the NPD Group, the apparel market is on track to surpass the pre-pandemic sales level of 2019 this year. Apparels have generated $13.3 million more in sales in the first eight months this year than the same period in 2019.

According to a new report from Retail Dive, spending on apparel by consumers between 57 and 75 years grew 28% from the first half of 2019. The report further says that this year baby boomers are likely to drive sales.

Interestingly, the recent gains came despite a surge in cases of the Delta variant. This means that people are 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 four apparel stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Levi Strauss & Co. (LEVI - Free Report) designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's, Dockers, Signature by Levi Strauss & Co. and Denizen brands. 

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 8.2% over the past 60 days. Levi Strauss carries a Zacks Rank #2.

Boot Barn Holdings, Inc. (BOOT - Free Report) operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories. The company's products include boots, denim, western shirts, cowboy hats, belts and belt buckles, and western-style jewelry and accessories.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 36% over the past 60 days. Boot Barn Holdings carries a Zacks Rank #1.

Tilly's (TLYS - Free Report) is a specialty retailer in the action sports industry selling clothing, shoes and accessories. The company distributes t-shirts, sweatshirts, jackets, shorts, pants, jeans, sweaters, swimwear, shoes and accessories for men, women and kids through its website.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 22.3% over the past 60 days. Tilly's sports a Zacks Rank #1.

Torrid Holdings (CURV - Free Report) is a direct-to-consumer brand of apparel, intimates and accessories in North America. It offers products across a broad assortment which includes tops, bottoms, denim, dresses, intimates, activewear, footwear and accessories. 

The company’s expected earnings growth rate for next year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 44.8% over the past 60 days. Torrid sports a Zacks Rank #1.