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URBN, ZUMZ & ASNA Score Decent Numbers in Holiday Season

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The Zacks Retail – Apparel and Shoes industry’s prospects are closely tied with the purchasing power of consumers. Certainly, a buoyant consumer environment owing to low unemployment rate and rising wages worked in favor of some of the industry participants. In fact, companies in this space brought in unique products and better bargains to draw customers.

While some succeeded in gaining ground on the back of omni-channel strategy, loyalty and marketing programs, supply chain enhancement and fast delivery options, there were a few that struggled. Stiff competition from e-commerce players such as Amazon (AMZN - Free Report) and a constant struggle to cope up with rapidly changing consumer trends might have taken a toll on the performances of few retailers.

Nevertheless, here we have highlighted three stocks in the Apparel and Shoes industry — Urban Outfitters (URBN - Free Report) , Zumiez (ZUMZ - Free Report) and Ascena Retail Group (ASNA - Free Report) — that witnessed decent performance during the holiday season.



Urban Outfitters Holiday Comps Improved

Urban Outfitters came out with strong comparable sales (comps) numbers for the two months period (ended on Dec 31, 2018), which constitute the holiday season While net sales at the Comparable Retail segment jumped 5% driven by robust double-digit rise in the digital channel, the same at the Wholesale segment grew 3%. On a brand-wise basis, Comparable Retail segment net sales improved 6%, 5% and 4% at Free People, Urban Outfitters and the Anthropologie Group, respectively.

In fact, the company’s consistent focus on store openings, increasing digital penetration, merchandising improvements and international expansion has helped this Zacks Rank #2 (Buy) stock to remain on growth track . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zumiez Reports Decent Comps Performance

Zumiez witnessed favorable comps trend during the holiday period. In November and December, this specialty retailer of apparel, footwear and accessories witnessed 2.3% and 4.9% comps growth, respectively. Comps benefited from higher transaction volume as well as increase in dollars per transaction. Strength in the men’s, women’s and footwear categories also aided comps growth.

Apart from comps, the company’s top line has also been gaining from differentiated merchandising strategies, integrated sales channels and excellent customer service. Currently, Zumiez carries a Zacks Rank #3 (Hold).

Ascena Holiday Sales Rise

Ascena reported healthy sales numbers for the period from Nov 17, 2018 through Jan 1, 2019.  The company registered a 3% rise in comps in the holiday season against a 3% decline witnessed in the year-ago period. Comps growth was driven by continued momentum at Premium Fashion and impressive performance at the Value Fashion segment. At the Premium and the Value Fashion segments, comps rose 12% and 2%, respectively.

Management remains pleased with comps growth and margin expansion during the holiday season. Further, comps are still anticipated to increase 2-4% for the second quarter fiscal 2019. Currently, Ascena carries a Zacks Rank #2.

We note that shares of Zumiez and Ascena have gained 24.4% and 17.6%, respectively, compared with the industry’s growth of 2.1% in a month. Although, shares of Urban Outfitters have declined 3.4% in the same time frame, the solid holiday sales numbers will help the stock to revive in the near term.

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