Apparel Industry Outlook Murky on Coronavirus Woes

Emilee Geist 3 years ago

The Zacks Textile – Apparel industry is housed within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #216, which places it in the bottom 14% of more than 250 Zacks industries. The group’s Zacks Industry Rank, which is basically the average of the Zacks […]

  • Companies in the textile-apparel space have been reeling under the impact of the novel coronavirus outbreak. Temporary store closures have hit their performances hard, while some of the companies have also been grappling with supply-chain disruptions. Although most stores have reopened with curbs being lifted, consumer traffic remains below pre-pandemic levels. Further, the second wave of the virus has kept customers confined to their homes, who prefer to step out only for essentials. Certainly, soft traffic, heightened promotional environment and uncertainty related to consumer shopping dynamics pose near-term challenges for companies in the textile-apparel industry.
     
  • Industry players have been benefiting from their efforts to boost online operations, as customers have increasingly resorted to this mode of shopping amid the pandemic. Companies are likely to benefit from digital endeavors like upgraded payment systems, online purchases and pick-up facility at stores, improved e-commerce sites, and effective mobile apps. Apart from this, some apparel players started producing face masks to meet commercial and consumer demand, while some are making medical gowns for the healthcare sector. However, escalated costs associated with such investments, along with the other COVID-19 related expenses may weigh on margins. Apart from this, volatile currency movements due to large overseas exposure is a worry for several textile-apparel companies.
     
  • Efforts to enhance brands via marketing strategies, licensing deals, buyouts, innovation and alliances are likely to keep supporting players in the space. Also, focus on keeping pace with changing consumer preferences is a major driver. In this regard, rising inclination toward health and fitness is working in favor of activewear and sporting equipment providers. Also, many companies offer fitness gadgets and adopt other tracking platforms to make the most of consumers’ evolving tastes.

    • Zacks Industry Rank Indicates Drab Prospects

    Industry Underperforms Sector and S&P 500

    One-Year Price Performance

    Industry’s Current Valuation

    Price-to-Earnings Ratio (Past 5 Years)

    Price and Consensus: HBI

    Crocs, Inc. (CROX): The Zacks Consensus Estimate for this innovative casual footwear company’s current-year earnings has more than doubled in the past 30 days. This Zacks Rank #1 company has an estimated long-term earnings growth rate of 15%. Further, the company has a significant trailing four-quarter earnings surprise, on average. Markedly, Crocs’ shares have surged 57.7% in a year.

    Price and Consensus: CROX

    Price and Consensus: PVH

    Price and Consensus: LULU

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    V.F. Corporation (VFC) : Free Stock Analysis Report
     
    Under Armour, Inc. (UAA) : Free Stock Analysis Report
     
    Ralph Lauren Corporation (RL) : Free Stock Analysis Report
     
    PVH Corp. (PVH) : Free Stock Analysis Report
     
    lululemon athletica inc. (LULU) : Free Stock Analysis Report
     
    Hanesbrands Inc. (HBI) : Free Stock Analysis Report
     
    Crocs, Inc. (CROX) : Free Stock Analysis Report
     
    To read this article on Zacks.com click here.
     
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    V.F. Corporation (VFC) : Free Stock Analysis Report
     
    Under Armour, Inc. (UAA) : Free Stock Analysis Report
     
    Ralph Lauren Corporation (RL) : Free Stock Analysis Report
     
    PVH Corp. (PVH) : Free Stock Analysis Report
     
    lululemon athletica inc. (LULU) : Free Stock Analysis Report
     
    Hanesbrands Inc. (HBI) : Free Stock Analysis Report
     
    Crocs, Inc. (CROX) : Free Stock Analysis Report
     
    To read this article on Zacks.com click here.
     
    Zacks Investment Research

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