4 Solid Apparel Stocks to Buy on Soaring Sales

The apparel market seems to be a bright spot in the retail sector. Retail sales are still on the rise despite soaring prices, but a few segments have started feeling the heat. However, the apparel market seems to have outperformed the other segments, with sales soaring in the past consecutive months.

One of the primary reasons behind this is that the economy is fast reopening and people are getting back to work. Hence, demand for new clothes is once again on the rise and sales have now crossed the pre-pandemic figures. This has been helping stocks like J.Jill, Inc. JILL, Levi Strauss & Co. LEVI, Lulu's Fashion Lounge Holdings, Inc. LVLU and Sportsman's Warehouse Holdings, Inc. SPWH.

Apparel Sales Rise

According to the latest Mastercard SpendingPulse, apparel sales in the United States soared 10.8% year over year in April. Besides, sales jumped 8.4% from the pre-pandemic level, indicating that people are aggressively spending on new clothes despite rising costs.

April’s jump comes after the Commerce Department reported a 2.6% rise in apparel sales in March.

Higher prices have been a cause of concern for both retailers and consumers, as apparel is one thing people cut down on to check higher expenditure. However, that hasn’t been the case so far as demand for new clothing has been on the rise, which is giving a boost to apparel sales.

According to the report, people are willing to shell out more as they are refreshing their wardrobes ahead of summer travel. Also, offices are reopening and people are getting back to work after staying at home for almost two years. Demand for new clothes is also being driven by office goers.

Apparel Market on Track for Growth

The overall retail sector is doing well despite inflationary pressure. According to the Mastercard SpendingPulse, retail sales grew 7.2% year over year in April, driven by in-store shopping.

In-store shopping, which had come to a standstill during the peak of the pandemic, affected apparel sales as many prefer buying clothes only after judging the product physically. The reopening of the economy is once again bringing things back to normal, which has seen people visiting physical stores, thus driving sales.

Also, rising costs have compelled the Fed to already hike rates twice to check inflation. The Fed plans to hike rates at least thrice this year, which should further escalate prices. Thus, many have already started shopping for winter clothing, keeping in mind that prices will further jump. This is also giving a boost to apparel sales.

People are also planning vacations as traveling has finally picked up after a two-year lull. This has resulted in a new surge in demand for clothing and accessories, resulting in increased sales.

Furthermore, both personal income and spending are rising. Personal spending in the United States climbed 0.5% in March, while personal spending increased 1.1%.

Additionally, hiring is increasing, and unemployment is at an all-time low. As a result, with more cash on hand, expenditure is expected to expand in the near future, benefiting the apparel industry.

Our Choices

Given this scenario, it would be wise to invest in these four apparel stocks. Each of the stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

J.Jill, Inc. operates as a specialty retailer of women’s apparel. JILL offers sweaters, tops, pants, dresses, shorts, skirts, sleepwear and accessories. J. Jill markets through retail stores, website and catalog.

J.Jill’s expected earnings growth rate for the current year is 5.2%. The Zacks Consensus Estimate for current-year earnings has improved 24.4% over the past 60 days. JILL has a Zacks Rank #1.

Levi Strauss & Co. designs and markets jeans, casual wear and related accessories for men, women and children under the Levi's, Dockers, Signature by Levi Strauss & Co. and Denizen(R)brands. LEVI’s products are sold through chain retailers, department stores, online sites and brand-dedicated retail stores and shop-in-shops. Levi Strauss & Co. is based in San Francisco, United States.

Levi Strauss & Co’s expected earnings growth rate for the current year is 5.4%. The Zacks Consensus Estimate for current-year earnings has improved 2% over the past 60 days. LEVI carries a Zacks Rank #2.

Lulu's Fashion Lounge Holdings, Inc. is a customer-driven, digitally-native women's fashion brand. LVLU, under its Lulus brand, sells dresses, shirts, bottoms, bridal wear, intimates, swimwear, footwear, and accessories. Lulu's Fashion Lounge Holdings sells through its website, mobile app, social media platforms, email, and SMS.

Lulu's Fashion Lounge Holdings’ expected earnings growth rate for the current year is 3.5%. The Zacks Consensus Estimate for current-year earnings has improved 1.7% over the past 60 days. LVLU carries a Zacks Rank #2.

Sportsman's Warehouse Holdings, Inc. is an outdoor sporting goods retailer. SPWH stores offer camping products, fishing products, and hunting and shooting products. Sportsman's Warehouse Holdings’ stores also provide clothing products, footwear products and optics, electronics and accessories.

Sportsman's Warehouse Holdings’ expected earnings growth rate for next year is 12.5%. The Zacks Consensus Estimate for current-year earnings has improved 23.1% over the past 60 days. SPWH has a Zacks Rank #2.

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Lulu's Fashion Lounge Holdings, Inc. (LVLU) : Free Stock Analysis Report
 
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