The Zacks Analyst Blog Highlights Urban Outfitters, American Eagle Outfitters, Abercrombie & Fitch and Boot Barn Holdings
For Immediate Release
Chicago, IL – October 10, 2023 – 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: Urban Outfitters, Inc. URBN, American Eagle Outfitters, Inc. AEO, Abercrombie & Fitch Co. ANF and Boot Barn Holdings, Inc. BOOT.
Here are highlights from Monday’s Analyst Blog:
4 Apparel Picks to Capitalize on the Holiday Shopping Frenzy
The holiday season ushers in festive cheer and unveils promising investment prospects for investors. With the U.S. retail sector primed for growth, investors are shifting their focus toward apparel stocks. As Americans look to refresh their wardrobes this festive season, apparel companies are experiencing decent demand. Sales at clothing and clothing accessories stores have seen an uptick, reflecting people's enthusiasm to shop for their loved ones.
This trend highlights a lucrative market opportunity for investors keen on capitalizing on the seasonal uptrend in consumer spending. Per the Commerce Department, sales at clothing & clothing accessories stores grew 1.3% year over year during the month of August 2023. This followed an increase of 2.6% in July from the prior-year period.
An uptick in sales is good news for retailers such as Urban Outfitters, Inc., American Eagle Outfitters, Inc., Abercrombie & Fitch Co. and Boot Barn Holdings, Inc., especially as the holiday season approaches, which is a make-or-break time.
Industry participants have been focusing on deepening engagements with customers and enhancing digital as well as data analytics capabilities. Emphasizing the launch of new styles, customization options and refreshed store environments, these companies are leaving no stone unturned to attract shoppers. Expedited delivery services, such as doorstep delivery, curbside pickup, buy online and pick up at store and contactless payment gateways, are set to play pivotal roles in maximizing the share of customers' wallets.
According to Mastercard SpendingPulse, U.S. retail sales, excluding automotive, are anticipated to increase 3.7% from a year earlier during the traditional holiday period spanning Nov 1 to Dec 24. The survey projects apparel sales to increase 1% during the holiday period compared with the prior year.
The above-mentioned four stocks from the Retail - Apparel And Shoes industry look well positioned based on their sound fundamentals and earnings growth prospects.
4 Prominent Picks
Investors can count on Urban Outfitters. This leading lifestyle product and services company seems a promising bet due to its solid business strategies and sound fundamentals. Management has been strengthening its direct-to-consumer business, enhancing productivity across existing channels and optimizing inventory levels. URBN's strategic growth initiative, FP Movement and store-growth endeavors are also impressive.
The Zacks Consensus Estimate for Urban Outfitters' current fiscal sales and EPS suggests growth of 6.6% and 83.4%, respectively, from the year-ago reported figure. URBN has a trailing four-quarter earnings surprise of 19.2%, on average. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
American Eagle Outfitters with a Zacks Rank #1 is another potential pick. The company's efforts to rationalize inventory and contain costs are paying off. The strong performance of key brands like American Eagle and Aerie, coupled with expansions into premium and activewear segments, indicates potential for growth. The introduction of new store designs and online enhancements demonstrates a commitment to improving the customer experience.
The Zacks Consensus Estimate for American Eagle Outfitters' current fiscal sales and EPS suggests growth of 2.2% and 33%, respectively, from the year-ago reported figure. AEO has a trailing four-quarter earnings surprise of 43.2%, on average.
Abercrombie & Fitch, one of the leading global omnichannel specialty retailers of apparel and accessories for men, women and kids, is worth betting on. The company's ability to adapt, innovate and connect with customers positions it for a prosperous future. The company's regional operating model, with a focus on the Americas, the EMEA and the APAC, provides a solid foundation for global expansion. Its strong brand portfolio, operational efficiency and regional strategy make it an attractive investment opportunity as it continues to navigate and thrive in the evolving retail landscape.
This Zacks Rank #1 company delivered a trailing four-quarter earnings surprise of 724.8%, on average. The Zacks Consensus Estimate for Abercrombie & Fitch's current financial-year sales suggests growth of 10% from the year-ago period.
We also suggest betting on Boot Barn Holdings. This lifestyle retailer of western and work-related footwear, apparel and accessories has been successfully navigating through the challenging environment with merchandising strategies, omnichannel capabilities and better expense management, as well as marketing. These, combined with the expansion of the store base, have helped this Zacks Rank #2 (Buy) company gain market share and strengthen its position in the industry.
Impressively, the Zacks Consensus Estimate for Boot Barn Holdings' current-fiscal sales calls for growth of 7.8% from the year-ago reported figure. BOOT has a trailing four-quarter earnings surprise of 13.5%, on average.
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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
American Eagle Outfitters, Inc. (AEO) : Free Stock Analysis Report
Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report
Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report
