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The Zacks Analyst Blog Highlights: The Children's Place, Abercrombie & Fitch, Tapestry, Hibbett and Boot Barn

The Zacks Analyst Blog Highlights: The Children's Place, Abercrombie & Fitch, Tapestry, Hibbett and Boot Barn

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This story originally appeared on Zacks

For Immediate Release

Chicago, IL – October 7, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: The Children's Place, Inc. PLCE, Abercrombie & Fitch Co. ANF, Tapestry, Inc. TPR, Hibbett, Inc. HIBB and Boot Barn Holdings, Inc. BOOT.

- Zacks

Here are highlights from Wednesday’s Analyst Blog:

5 Apparel Picks to Refurbish Your Portfolio This Holiday Season

As Americans look to refresh their wardrobes this holiday season — thanks to the resumption of active social lifestyle, events and occasions — apparel companies have been witnessing resurgence in demand. Sales at clothing & clothing accessories stores have been increasing as more people venture out and shop for their loved ones. Surely, the pandemic-relief package and stepped-up vaccinations played a major role in boosting consumer confidence.

Per the Commerce Department, sales at clothing & clothing accessories stores grew 38.8% year over year during the month of August 2021. This followed an increase of 42.6% in July from the prior-year period. An uptick in sales is good news for retailers ahead of the holiday season, which is a make-or-break time. Evidently, industry players need to address any logistical or inventory issues and roll out strategies to provide a seamless shopping experience, whether offline or online.

Industry participants have been focusing on deepening engagements with customers and enhancing digital as well as data analytics capabilities. They have been emphasizing on the launch of newer styles, customization options and refreshed store environments to woo shoppers. Undeniably, expedited delivery services like doorstep delivery, curbside pickup or buy online and pick up at store as well as contactless payment gateway will continue to play a crucial role in maximizing share of customers’ wallet.

Per Mastercard SpendingPulse, U.S. retail sales, excluding automotive and gas, are anticipated to increase 7.4% from a year earlier during the traditional holiday period that runs from Nov 1-Dec 24. With e-commerce still being one of the preferred modes for shopping, Mastercard SpendingPulse foresees online sales to rise by 7.6%. The survey projects apparel sales to increase 45.9% during the holiday period compared with the prior year.

That said, we have highlighted five stocks from the Retail - Apparel And Shoes industry that look well positioned based on their sound fundamentals and earnings growth prospects. These stocks have either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

5 Prominent Picks

The Children's Place is worth betting on. This children's specialty apparel retailer has been constantly deploying resources to expand product offerings, upgrade distribution channels and create seamless omni-channel capabilities.

The company’s $50 million digital transformation investment is reaping benefits. It has rolled out "BOPIS" (Buy Online, Pick Up in Store) and “Save the Sale” functionality. It has also launched “BOSS” or Buy Online, Ship to Store capabilities, the response to which has been encouraging. The company has introduced Afterpay, a buy now pay later option, for its customers. Impressively, management intends to allocate a major portion of its fiscal 2021 capital expenditures to digital and supply chain fulfillment initiatives.

This Zacks Rank #1 company’s bottom line has outperformed the Zacks Consensus Estimate by a wide margin in the trailing four quarters. The Zacks Consensus Estimate for its current financial year sales and earnings per share suggests growth of 26.9% and 403.8%, respectively, from the year-ago period.

Investors can count on Abercrombie & Fitch, a specialty retailer of apparel and accessories. The company has been making significant progress in expanding digital and omni-channel capabilities to better engage with consumers.

Digital sales contributed about 44% to total sales in second-quarter fiscal 2021. The company remains encouraged with its strong online presence and expects to keep gaining from this platform. This Zacks Rank #1 company plans to continue investing toward bolstering omni-channel capabilities including curbside pickup and ship from store services.

For fiscal 2021, the company anticipates capital expenditure of $100 million. Roughly 50% of the capital spending is expected to be used for investments in digital and technology.

Impressively, this Zacks Rank #1 company has a trailing four-quarter earnings surprise of 510.9%, on average. The Zacks Consensus Estimate for its current financial year sales and earnings per share suggests growth of 20.5% and 702.7%, respectively, from the year-ago period.

Tapestry is another potential pick. The company has been benefiting from the successful execution of the Acceleration Program. The program is aimed at transforming the company into a leaner and more responsive organization. It intends to build significant data and analytics capabilities with focus on enhancing digital and omni-channel capabilities, and operating with a clearly defined path and strategy for each of its brands namely Coach, Kate Spade and Stuart Weitzman.

This provider of luxury accessories and branded lifestyle products has a trailing four-quarter earnings surprise of 65.2%, on average. The Zacks Consensus Estimate for its current financial year sales and earnings indicates an improvement of 11.6% and 12.5%, respectively, from the year-ago period. The stock sports a Zacks Rank #1.

You may invest in Hibbett, an athletic-inspired fashion retailer. Management anticipates that pent-up demand and compelling merchandise coupled with superior customer service and a best-in-class omni-channel platform should continue to drive top and bottom-line performance.

The company’s focus on both in-store and online experience, distribution capabilities and vendor relationships will help generate sustainable profitable growth. The company expects mid-teens growth in comparable sales for fiscal 2022.

This Zacks Rank #1 company has a trailing four-quarter earnings surprise of 124.6%, on average. The Zacks Consensus Estimate for its current financial year sales and earnings per share indicates an improvement of 18.3% and 84.6%, respectively, from the year-ago period.

We also suggest betting on Boot Barn. This lifestyle retailer of western and work-related footwear, apparel and accessories has been successfully navigating through the challenging environment, courtesy of merchandising strategies, omni-channel capabilities and better expense management as well as marketing. This combined with the expansion of store base has helped gain market share and strengthen position in the industry.

For fiscal 2022, management anticipates new unit growth of 10% and exclusive brand penetration growth of 350 basis points. Notably, this Zacks Rank #2 company has a trailing four-quarter earnings surprise of 38.6%, on average. The Zacks Consensus Estimate for its current financial year sales and earnings per share suggests growth of 40.6% and 129.2%, respectively, from the year-ago period.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.



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Abercrombie & Fitch Company (ANF): Free Stock Analysis Report

 

Hibbett, Inc. (HIBB): Free Stock Analysis Report

 

Boot Barn Holdings, Inc. (BOOT): Free Stock Analysis Report

 

The Childrens Place, Inc. (PLCE): Free Stock Analysis Report

 

Tapestry, Inc. (TPR): Free Stock Analysis Report

 

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