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4 Apparel Stocks to Continue With Winning Streak in 2024
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As we set our sights on 2024, the apparel industry emerges as a beacon of promise, signaling a fashion-forward future for investors. With rising incomes and a surge in consumer confidence, the industry is poised for exciting developments. Affordable and diverse fashion lines are making style accessible to all, while the launch of innovative designs keeps pace with ever-changing tastes. Customization options add a personal touch and refreshed store environments transform shopping into a dynamic experience.
Players in the clothing industry have been aggressively adopting various measures across online and offline channels. They have been making continued investments in omnichannel capabilities to drive overall growth. These areas include expanding the online assortment, boosting the user experience and improving fulfillment capabilities. Also, these further encompass convenient delivery options.
Industry players are also paying heed to loyalty programs and store-related efforts, including expansion, remodeling, relocation and renovations, as offline shopping is gaining major prominence after the pandemic.
The performance of the industry is closely tied to consumers’ purchasing power. Consumer spending, a key catalyst for the economy, has shown resilience despite a tough economic environment. Anticipating a potential interest rate cut by the Federal Reserve in 2024, especially if inflation continues its downward trend, there is an expectation of a further boost to consumer spending. This optimistic scenario would likely encourage customers to engage in discretionary purchases, including clothing.
That said, we have shortlisted four apparel stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), have a market cap of more than $1 billion and are up above 35% in the six-month time frame.
4 Prominent Picks
Abercrombie & Fitch (ANF - Free Report) , a specialty apparel retailer, is worth betting on. The company has constantly been deploying resources to expand product offerings, upgrade distribution channels, create seamless omnichannel capabilities and deepen customer engagement. It is benefiting from brand strength and store-optimization plans. The company is witnessing favorable margin trends driven by reduced freight costs and improved average unit retail.
Abercrombie’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters. The Zacks Consensus Estimate for ANF’s fiscal 2023 sales reflects growth of 13.3% from the prior-year reported figure. The consensus estimate for earnings per share (EPS) has moved north 28.4% in the past 30 days. The stock has surged 150.4% in the past six months. A VGM Score of A further adds strength to this current Zacks Rank #1 company. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may invest in Gap (GPS - Free Report) , a fashion retailer of apparel and accessories. The company is well on track with the execution of its Power Plan 2023 plan. Gap has been witnessing lower airfreight and improved promotions, which have been aiding margins. Its cost-saving actions also bode well.
Image Source: Zacks Investment Research
Gap’s bottom line has outperformed the Zacks Consensus Estimate by an average surprise of 137.9% in the trailing four quarters. This Zacks Rank #1 company has a VGM Score of B. The Zacks Consensus Estimate for GPS’ current financial year EPS indicates an increase of 387.5% year over year. The consensus mark for EPS has jumped 10.6% in the past 30 days. The stock has skyrocketed 142.6% in the past six months.
We also suggest betting on Deckers Outdoor Corporation (DECK - Free Report) . This leading apparel and accessories retailer has been successfully navigating through the challenging environment, courtesy of merchandising strategies, omnichannel capabilities and better expense management and marketing. This, combined with the expansion of the store base, has helped the company gain market share and strengthen its position in the industry.
Impressively, Deckers has a trailing four-quarter earnings surprise of 26.3%, on average. This Zacks Rank #1 company has a VGM Score of B. The Zacks Consensus Estimate for DECK’s current financial year sales and EPS suggests growth of 11.7% and 21.3%, respectively, from the year-ago corresponding figures. The consensus mark for EPS has moved north 0.3% in the past 30 days. The stock has increased 39.8% over the last six months.
American Eagle Outfitters (AEO - Free Report) , the provider of luxury accessories and branded lifestyle products, is another potential pick. The company is gaining from brand strength and solid demand for its products that resonate well with customers. American Eagle is on track with its Real Power Real Growth value-creation plan, which aims to drive profitability through real estate and inventory-optimization efforts, omnichannel and customer focus. The Aerie brand is also gaining traction.
American Eagle has a trailing four-quarter earnings surprise of 23%, on average. This Zacks Rank #2 company has a VGM Score of A. The Zacks Consensus Estimate for AEO’s current financial year sales and EPS show increases of 4% and 39.2%, respectively, from the year-earlier corresponding figures. The consensus estimate for EPS has risen 1.5% in the past 30 days. The stock has surged 78.9% in the six-month time frame.
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4 Apparel Stocks to Continue With Winning Streak in 2024
As we set our sights on 2024, the apparel industry emerges as a beacon of promise, signaling a fashion-forward future for investors. With rising incomes and a surge in consumer confidence, the industry is poised for exciting developments. Affordable and diverse fashion lines are making style accessible to all, while the launch of innovative designs keeps pace with ever-changing tastes. Customization options add a personal touch and refreshed store environments transform shopping into a dynamic experience.
Players in the clothing industry have been aggressively adopting various measures across online and offline channels. They have been making continued investments in omnichannel capabilities to drive overall growth. These areas include expanding the online assortment, boosting the user experience and improving fulfillment capabilities. Also, these further encompass convenient delivery options.
Industry players are also paying heed to loyalty programs and store-related efforts, including expansion, remodeling, relocation and renovations, as offline shopping is gaining major prominence after the pandemic.
The performance of the industry is closely tied to consumers’ purchasing power. Consumer spending, a key catalyst for the economy, has shown resilience despite a tough economic environment. Anticipating a potential interest rate cut by the Federal Reserve in 2024, especially if inflation continues its downward trend, there is an expectation of a further boost to consumer spending. This optimistic scenario would likely encourage customers to engage in discretionary purchases, including clothing.
That said, we have shortlisted four apparel stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy), have a market cap of more than $1 billion and are up above 35% in the six-month time frame.
4 Prominent Picks
Abercrombie & Fitch (ANF - Free Report) , a specialty apparel retailer, is worth betting on. The company has constantly been deploying resources to expand product offerings, upgrade distribution channels, create seamless omnichannel capabilities and deepen customer engagement. It is benefiting from brand strength and store-optimization plans. The company is witnessing favorable margin trends driven by reduced freight costs and improved average unit retail.
Abercrombie’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters. The Zacks Consensus Estimate for ANF’s fiscal 2023 sales reflects growth of 13.3% from the prior-year reported figure. The consensus estimate for earnings per share (EPS) has moved north 28.4% in the past 30 days. The stock has surged 150.4% in the past six months. A VGM Score of A further adds strength to this current Zacks Rank #1 company. You can see the complete list of today’s Zacks #1 Rank stocks here.
You may invest in Gap (GPS - Free Report) , a fashion retailer of apparel and accessories. The company is well on track with the execution of its Power Plan 2023 plan. Gap has been witnessing lower airfreight and improved promotions, which have been aiding margins. Its cost-saving actions also bode well.
Image Source: Zacks Investment Research
Gap’s bottom line has outperformed the Zacks Consensus Estimate by an average surprise of 137.9% in the trailing four quarters. This Zacks Rank #1 company has a VGM Score of B. The Zacks Consensus Estimate for GPS’ current financial year EPS indicates an increase of 387.5% year over year. The consensus mark for EPS has jumped 10.6% in the past 30 days. The stock has skyrocketed 142.6% in the past six months.
We also suggest betting on Deckers Outdoor Corporation (DECK - Free Report) . This leading apparel and accessories retailer has been successfully navigating through the challenging environment, courtesy of merchandising strategies, omnichannel capabilities and better expense management and marketing. This, combined with the expansion of the store base, has helped the company gain market share and strengthen its position in the industry.
Impressively, Deckers has a trailing four-quarter earnings surprise of 26.3%, on average. This Zacks Rank #1 company has a VGM Score of B. The Zacks Consensus Estimate for DECK’s current financial year sales and EPS suggests growth of 11.7% and 21.3%, respectively, from the year-ago corresponding figures. The consensus mark for EPS has moved north 0.3% in the past 30 days. The stock has increased 39.8% over the last six months.
American Eagle Outfitters (AEO - Free Report) , the provider of luxury accessories and branded lifestyle products, is another potential pick. The company is gaining from brand strength and solid demand for its products that resonate well with customers. American Eagle is on track with its Real Power Real Growth value-creation plan, which aims to drive profitability through real estate and inventory-optimization efforts, omnichannel and customer focus. The Aerie brand is also gaining traction.
American Eagle has a trailing four-quarter earnings surprise of 23%, on average. This Zacks Rank #2 company has a VGM Score of A. The Zacks Consensus Estimate for AEO’s current financial year sales and EPS show increases of 4% and 39.2%, respectively, from the year-earlier corresponding figures. The consensus estimate for EPS has risen 1.5% in the past 30 days. The stock has surged 78.9% in the six-month time frame.