The athleisure market has been witnessing robust trends as customers continue to look for comfortable attire to spend the days at home and shift to exercising more than ever. Rising health consciousness, the willingness to live an active lifestyle and look fit have led consumers to incorporate sports and fitness routines into their daily lives. The demand for activewear/athleisure products has increased significantly over time, which is expected to accelerate in 2022.
As health consciousness rules people’s minds these days, they are more inclined toward mindful exercises like yoga and meditation, as uncertainties regarding the pandemic remain and work-from-home continues. As a result, apart from athleisure wear, there is likely to be a strong demand for virtual fitness apps, wearable technology, workout footwear, activewear, workout equipment and other accessories. Consumers are adding a variety of activewear to their wardrobes more than ever. Companies selling footwear and fitness gear are reinventing their products to suit the at-home fitness needs of consumers. Earlier, athletes wore workout clothes only while exercising, but now people wear athletic and casual clothing at all times. This has changed the dynamics of the athleisure market, leading to rapid growth of the sector in the past decade. Apart from being comfortable, customers look for fashionable activewear clothes that can be worn to gym as well as workplace, without being uncomfortable. As a result, companies are now offering sportswear that can be worn at work, for hiking, outings, picnics and while exercising. Athletic goods and apparel companies now offer everything from sweatshirts, leggings, pants, jackets and tops to yoga wear, and running clothes for both men and women. People are clubbing athleisure styles like tops with blazers to give it a formal look at an office meeting. The companies continue to innovate styles, materials and colors as well as incorporate functional designs to grab a large share of the fast-growing market. Furthermore, the increased participation of women in sports and outdoor activities in recent years has been a boon for the athleisure market. Grand View Research recently quoted that the women segment accounted for the largest revenue share of more than 41% in 2020. E-commerce has also been playing a great role in the athleisure market’s growth. The companies in the segment are looking to build a customer base through websites, social media and other digital channels. As consumers continue to show interest in shopping from home despite the lifting of the pandemic-led bans, growth of athletic-inspired apparel and digital sales are likely to stay. Companies focused on expanding their athletic-based apparel lines and building on e-commerce capabilities are expected to witness growth in 2022. Per a September 2021 report by Grand View Research, the global athleisure market size was $284.73 billion in 2020 and is expected to have reached $306.62 billion in 2021. Moreover, the athleisure market is expected to grow, witnessing a compound annual growth rate (CAGR) of 8.6% from 2021 to 2028. Stocks in Focus
We have shortlisted four stocks set to ride the boom in the athleisure trends. These companies carry a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), and have witnessed robust growth in 2021. You can see
. the complete list of today’s Zacks #1 Rank stocks here One-Year Performance
Image Source: Zacks Investment Research
Under Armour, Inc. ( UAA Quick Quote UAA - Free Report) is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activities in the United States and internationally. Based in Baltimore, MD, the company currently carries a Zacks Rank #2 and has rallied 16.9% in the past year. UAA has been benefiting from its robust operating model, and investments across product and marketing. Under Armour is progressing well with its multi-year transformation plan. Efforts to build brand image, strengthen the supply chain, manage inventory and contain costs should benefit the company in the long run. The Zacks Consensus Estimate for UAA’s 2022 sales and earnings indicates a rise of 6.1% and 5%, respectively, from the year-ago period’s reported levels. The company delivered a positive earnings surprise of 244.5%, on average, in the trailing four quarters. NIKE, Inc. ( NKE Quick Quote NKE - Free Report) is a leader in the athletic footwear, apparel, equipment and accessories business. Based in Beaverton, OR, the company currently carries a Zacks Rank #3 and has rallied 16.8% in a year’s time. The return of sports activities, improved traffic trends and continued digital momentum are key to NIKE’s growth despite the ongoing impacts of supply-chain disruptions in its marketplace. Product innovation, brand strength and scale of operations have been driving digital sales. In fiscal 2022, NIKE expects demand to remain robust, driven by its strong customer connections and brand momentum. The Zacks Consensus Estimate for NKE’s fiscal 2022 sales and earnings indicates a rise of 5.6% and 1.4%, respectively, from the year-ago period’s reported levels. The company delivered a positive earnings surprise of 34.4%, on average, in the trailing four quarters. lululemon athletica inc. ( LULU Quick Quote LULU - Free Report) , a Vancouver-based yoga-inspired athletic apparel company that creates lifestyle components, has been a pioneer in the athleisure wear business. It has the credit of introducing the concept of leggings to the world. LULU remains optimistic about the innovations it plans to bring in its assortments for both men and women. Management intends to keep investing in strategies to maintain customer footfall, including augmenting its store base and enhancing shopping experiences. lululemon expects to capture the growing online demand and ensure a robust shopping experience through its accelerated e-commerce investments this year. The company delivered an earnings surprise of 21%, on average, in the trailing four quarters. The Zacks Consensus Estimate for LULU’s fiscal 2022 sales and earnings indicates growth of 16.4% and 19.7 %, respectively, from the year-ago period’s reported levels. The company currently carries a Zacks Rank #3 and has risen 10.6% in a year. Winston-Salem, NC, Hanesbrands Inc. ( HBI Quick Quote HBI - Free Report) engages in designing, manufacturing, sourcing, and selling apparel essentials for men, women, and children in the United States and internationally. The company’s Activewear segment offers casual wear and activewear clothing for men, women and children. Hanesbrands is on track with its Full Potential plan, which includes growing the global Champion brand, re-igniting innerwear growth, driving consumer-centricity and focusing on its portfolio. Hanesbrands is focused on making incremental investments in its online business to keep pace with consumers’ evolving shopping patterns due to increased digital shopping penetration. The company delivered an earnings surprise of 28.6%, on average, in the trailing four quarters. The Zacks Consensus Estimate for HBI’s 2022 sales and earnings indicates growth of 4% and 5.2 %, respectively, from the year-ago period’s reported levels. The company currently carries a Zacks Rank #3 and has risen 10.7% in a year.