Chicago, IL – April 8, 2025 – Today, Zacks Equity Research discusses Ralph Lauren Corp. RL, V.F. Corp. VFC, Hanesbrands Inc. HBI and G-III Apparel Group, Ltd. GIII.
Industry: Apparel
Link: https://www.zacks.com/commentary/2440905/4-textile-apparel-stocks-set-to-benefit-from-strong-industry-momentum
Companies in the Zacks Textile - Apparel industry are strengthening their omnichannel strategies to integrate their physical and digital platforms seamlessly. With consumers increasingly turning to online shopping, e-commerce has become a key focus for businesses in the textile-apparel sector.
Despite rising investments in marketing and promotions affecting profitability, along with potential tariff challenges, brand-building initiatives such as product innovations and strategic acquisitions are helping companies like Ralph Lauren Corp., V.F. Corp., Hanesbrands Inc. and G-III Apparel Group, Ltd. maintain competitiveness and capitalize on growth opportunities in the expanding market.
The Zacks Textile - Apparel industry includes companies and lifestyle brands that manufacture, design, distribute, source, market and sell apparel, footwear, and accessories for men and women. These include fashion apparel like dresses, pants, skirts, shorts, shirts, jackets, blouses and knitwear, and intimate apparel like underwear and shapewear.
The industry also comprises companies offering apparel for a healthy lifestyle and athletic activities, such as yoga, running and training. Some companies also deal with fitness-related accessories like gloves, bags, headwear and sports masks. The industry participants operate through direct-to-consumer (brick-and-mortar and online), wholesale and licensing distribution channels. Most players operate through stores and digital networks in the United States and internationally.
Digital Transformation & Offline Retail Strategies: As consumers effortlessly move between physical and digital platforms, textile-apparel companies are improving customer experiences across all channels. These businesses are focusing on enhancing customer experiences across all touchpoints, prioritizing investments to improve in-store interactions and boost brick-and-mortar sales.
At the same time, the convenience of online shopping is fueling significant growth in e-commerce, prompting brands to upgrade their digital platforms, improve mobile applications, modernize payment systems, and integrate both online and offline operations. To meet growing consumer demand, companies are expanding their order fulfillment capabilities and offering services like buy online, pick up in-store and curbside delivery. In addition, the integration of AI technologies is helping optimize customer experiences, improve inventory management and streamline operations, further driving efficiency and engagement.
Brand-Enhancing Strategies: Textile-apparel companies are gaining from initiatives aimed at strengthening their brands through diverse marketing strategies, licensing agreements, acquisitions and partnerships. Introducing new products plays a crucial role in their growth strategies, with ongoing product innovation being essential for staying competitive and meeting evolving consumer demands.
Cost Concerns: Textile-apparel companies remain exposed to challenges related to elevated input costs, which may affect their profitability. Higher selling, general, and administrative (SG&A) costs, stemming from increased marketing investments and enhancements to physical and digital retail channels, are concerning.
Many firms are vulnerable to shipping disruptions, which can lead to delays and increased freight expenses, ultimately squeezing their overall profit margins. The competitive labor market adds another layer of difficulty, posing threats to the profitability of these companies. In addition, potential tariff impacts could increase costs for these players, adding further pressure on their financial performance.
The Zacks Textile – Apparel industry is housed within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #68, which places it in the top 28% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive aggregate earnings outlook for its constituent companies. Since the beginning of January 2025, the industry’s consensus earnings estimate for the current financial year has improved 0.3%.
Let’s look at the industry’s performance and current valuation.
The Zacks Textile - Apparel industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past six months.
The industry has declined 16.8% compared with the broader sector and the S&P 500’s fall of 11.9% and 11.4%, respectively.
On the basis of forward 12-month price-to-earnings (P/E), commonly used for valuing consumer discretionary stocks, the industry is currently trading at 10.06X compared with the S&P 500’s 18.56X and the sector’s 15.79X.
Over the past five years, the industry has traded as high as 29.82X and as low as 9.93X, with the median being 13.99X.
Ralph Lauren: The Zacks Rank #1 (Strong Buy) company is a major designer, marketer and distributor of premium lifestyle products. Ralph Lauren is on track to surpass its revenue and profit goals with the “Next Great Chapter: Accelerate Plan.” This strategy focuses on streamlining the global organizational structure and enhancing technological capabilities.
The company is making significant strides in expanding its digital and omnichannel capabilities, with key investments in mobile, omnichannel integration and fulfillment solutions. Ralph Lauren's digital business, which includes directly operated websites, department store sites, pure-play e-commerce platforms and social commerce, has shown impressive growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Looking forward, management is optimistic about sustaining business momentum and executing the long-term strategy, further elevating the brand and strengthening its market position. The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year earnings per share (EPS) has remained unchanged in the past 30 days at $12.01. Shares of RL have gained 15.8% in the past year.
V.F. Corp: This Zacks Rank #1 company designs, manufactures and markets branded apparel and related products. VFC is making significant strides with its Reinvent transformation program, which focuses on brand building and improving operational performance. The company is advancing its four key strategies for transformation — reducing costs, strengthening its balance sheet, revitalizing the Americas segment and turning around Vans.
VFC is effectively lowering its cost base through targeted savings, with plans to invest a portion of these savings in boosting creativity, enhancing product development and elevating marketing efforts. This includes leveraging consumer insights, refining targeting strategies and standardizing processes. The company also aims to reinvest in product innovation and brand building to drive future growth. The Zacks Consensus Estimate for VFC’s current fiscal-year EPS has moved up a penny in the past 30 days to 74 cents. Shares of the company have declined 14.5% in the past year.
Hanesbrands: The company engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children. It currently carries a Zacks Rank #2 (Buy). Hanesbrands has strengthened its relationships with key retail partners, securing increased shelf space and distribution across various channels, which has enhanced brand visibility and consumer accessibility. The company is capitalizing on its global go-to-market strategy to capture demand in expanding international markets, such as Mexico and Australia.
Hanesbrands’ consumer-centric approach has driven market share gains fueled by innovation. The company is enhancing its innovation pipeline with AI-driven analytics to improve demand forecasting, optimize inventory and refine personalized marketing strategies. In addition, Hanesbrands’ cost-saving initiatives demonstrate a comprehensive approach to driving operational excellence and achieving stability. The Zacks Consensus Estimate for HBI’s current financial-year EPS has remained unchanged in the past 30 days at 53 cents. Shares of Hanesbrands have declined 8.6% in the past year.
G-III Apparel: This Zacks Rank #2 company designs, sources, and markets women and men's apparel. G-III Apparel’s impressive growth is driven by its strategic focus on expanding its own brands, including DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin. This shift allows the company to capture higher profitability, exercise greater control over branding and marketing, and enhance its pricing power. In addition, G-III is rapidly expanding its international footprint, opening up new revenue opportunities beyond North America.
G-III Apparel has also made significant investments in digital infrastructure, boosting its omnichannel capabilities. The company is leveraging AI-powered technologies to streamline operations, improve supply-chain transparency and optimize digital merchandising, all of which are expected to drive further margin expansion. The Zacks Consensus Estimate for GIII’s current fiscal-year EPS has moved up a penny in the past 30 days to $4.22. Shares of G-III Apparel have declined 9.6% in the past year.
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V.F. Corporation (VFC) : Free Stock Analysis Report
Ralph Lauren Corporation (RL) : Free Stock Analysis Report
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
G-III Apparel Group, LTD. (GIII) : Free Stock Analysis Report
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