Apparel Sales Jumps to Pandemic-Era High: 4 Winners

·4 min read

The apparel market is fast rebounding, with people spending more on clothes and fashion accessories, as they have finally started stepping out of their homes after more than a year of confinement in their homes due to the pandemic.

The rebound comes after a tough year for apparel makers. A massive vaccination drive has given people due confidence and they are planning holidays there by spurring apparel sales. And despite spreading the Delta variant of the coronavirus, the confidence of people has not been dented much.

Apparel Sales on Growth Track

Sales of apparel, accessories and shoes jumped 2.6% in June, according to the U.S. Census Bureau. The jump looks more attractive given that overall retail sales jumped only 0.6% in June on a month-over-month basis.

The reason is obvious. People have lately been spending more on apparel as they have finally got a chance to step out of their homes and plan holidays. This has resulted in them spending more on apparel, shoes and accessories.

Also, consumer spending has been changing lately toward fashion products due to the eased lockdown that is now allowing people to socialize more confidently. According to a recent survey by Sezzle, more than 75% of the consumers are spending more on apparel, fashion products and shows than any other category.

The Mastercard SpendingPulse also shows a similar trend that shows spending on apparel and shoes jumping more than any other category. The report shows that apparel sales soared 62.9.1% in June year over year and 12.7% from 2019.

Apparel Market Poised to Grow

E-commerce has been played a major role in saving not only the apparel industry but the overall retail sector ever since the coronavirus outbreak. The majority of the apparel sales happened online last year and the trend can be seen this year too.

According to Statista, the U.S. apparel market was valued $368 billion in 2019. That year, global apparel and footwear sales reached $1.9 trillion and are expected to cross the $3 trillion mark in the United States by 2030.

This rise is projected to be driven primarily by e-commerce. According to a report from Retail Dive, the trend of shopping apparel online grew 30% in 2020, the fastest since 2002. This was obviously due to the pandemic. In fact, apparel, footwear and accessories comprised 19% of the overall U.S. e-commerce sales in 2020.

Moreover, the back-to-school season is underway. According to another Mastercard SpendingPulse report, apparel sales during the back-to-school season are projected to jump 78.2% on a year-over-year basis.

Our Choices

Given this scenario, it would be prudent to invest in these five apparel stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hibbett Sports, Inc. HIBB typically caters to small counties with a population ranging from 25,000-75,000. Its merchandise assortment is focused on footwear, athletic equipment and apparel.

The company’s expected earnings growth rate for the current year is 46.2%. The Zacks Consensus Estimate for current-year earnings has improved 5.3% over the past 60 days.

Zumiez Inc. ZUMZ is one of the leading global lifestyle retailers. The company through its distinctive brand offering and diverse product selection has carved a niche in the rapidly changing apparel industry.

The company’s expected earnings growth rate for the current year is 41.3%. The Zacks Consensus Estimate for current-year earnings has improved 35.1% over the past 60 days.

Tillys, Inc. TLYS 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 81.9% over the past 60 days.

Vera Bradley, Inc. VRA is a designer, producer, marketer and retailer of accessories for women. Its products include handbags, accessories and travel and leisure items.

The company’s expected earnings growth rate for the current year is 49.2%. The Zacks Consensus Estimate for current-year earnings has improved 10.6% over the past 60 days.


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