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Chicago, IL – January 10, 2025 – Today, Zacks Equity Research discusses Ralph Lauren Corp. RL, V.F. Corporation VFC, Under Armour, Inc. UAA and G-III Apparel Group, Ltd. GIII.
Companies in the Zacks Textile - Apparel industry are enhancing their omnichannel strategies to leverage both physical and digital platforms. With consumers increasingly favoring online shopping, e-commerce has become a key focus for businesses in the textile-apparel sector.
However, rising investments in marketing and promotions are affecting profitability. Despite this, brand-building initiatives, such as product innovations and acquisitions, are helping companies like Ralph Lauren Corp., V.F. Corporation, Under Armour, Inc. and G-III Apparel Group, Ltd. to strengthen their position in the market.
About the Industry
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.
3 Trends Shaping the Future of the Textile - Apparel Industry
Economic Growth & Brand-Enhancing Endeavors: A growing economy, healthy consumer confidence and low unemployment are enhancing purchasing power, driving increased demand for discretionary items like apparel. This creates significant growth opportunities for businesses in the textile and apparel sector.
Companies in this space are capitalizing on strategies aimed at strengthening their brands through diverse marketing efforts, licensing agreements, acquisitions and partnerships. The introduction of new products is a vital component of their growth strategies. Continuous innovation in product offerings is essential for maintaining competitiveness and meeting the evolving demands of consumers.
Improved Store Traffic and Strong Digital Trends: As consumers seamlessly navigate between physical and digital platforms, textile-apparel companies are enhancing guest experiences across all touchpoints. These businesses are prioritizing investments to improve in-store interactions and boost brick-and-mortar sales.
At the same time, the convenience of online shopping is driving significant growth in e-commerce for these brands. They are focused on upgrading their e-commerce platforms, enhancing mobile applications, modernizing payment systems, and integrating online and offline operations while expanding their order fulfillment capabilities. Services like buy online, pick up in-store and curbside delivery are becoming increasingly popular among industry players.
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 result in delays and higher freight expenses, squeezing overall profit margins. The competitive labor market adds another layer of difficulty, posing threats to the profitability of these companies.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Textile – Apparel industry is housed within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #33, which places it in the top 13% 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 results from a positive aggregate earnings outlook for the constituent companies. Since the beginning of November 2025, the industry's consensus earnings estimate for the current financial year has improved almost 20%.
Let's look at the industry's performance and current valuation.
Industry vs. Broader Market
The Zacks Textile - Apparel industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past six months.
The industry has rallied 23.9% compared with the broader sector's growth of 13.4%. Meanwhile, the S&P 500 has increased 5.2%.
Industry's Current Valuation
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 14.72X compared with the S&P 500's 22.11X and the sector's 18.58X.
Over the past five years, the industry has traded as high as 29.82X and as low as 9.93X, with the median being 14.02X.
4 Must-Watch Textile - Apparel Stocks
Under Armour: The company is one of the leading designers, marketers, and distributors of authentic athletic footwear, apparel and accessories. This Zacks Rank #1 (Strong Buy) company is positioning itself for continued growth and market differentiation by focusing on premium product offerings, operational efficiency and global expansion. Under Armour is refining its core products, enhancing its direct-to-consumer (DTC) channels and strengthening customer loyalty through its growing membership program. These strategies not only foster deeper engagement with consumers but also expand revenue opportunities.
Under Armour is building on strong partnerships with athletes and leveraging data-driven marketing to elevate its global presence and competitive positioning. The Zacks Consensus Estimate for UAA's current fiscal-year earnings per share (EPS) has remained unchanged in the past 30 days at 27 cents. Shares of Under Armour have gained 17.3% in the past six months. You can see the complete list of today's Zacks #1 Rank stocks here.
V.F. Corp: This Zacks Rank #1 company designs, manufactures and markets branded apparel and related products. The company is benefiting from its ongoing strategic initiatives, particularly the Reinvent transformation program, which focuses on brand-building and improved operating performance. VFC's efforts to strengthen brands like Vans and The North Face, reduce costs and enhance its balance sheet are promising.
VFC is on track to deliver on its 2027 growth plan. The company anticipates a compounded annual growth rate (CAGR) for revenues in the mid- to high single digits over the next five years. The bottom line is predicted to grow at a five-year CAGR of high single to low double-digit. The Zacks Consensus Estimate for VFC's current fiscal-year EPS has remained unchanged in the past 30 days at 48 cents. Shares of the company have rallied 69.1% in the past six months.
G-III Apparel: This Zacks Rank #1 company designs, sources, and markets women and men's apparel. G-III Apparel's strong growth underscores its focus on the growth of its own brands, including DKNY, Karl Lagerfeld, Donna Karan and Vilebrequin. International growth is a critical focus area for the company as it continues to strengthen its platform in Europe and capitalize on its partnership with AWWG.
G-III Apparel is accelerating its digital growth and aims to become a leading omnichannel organization, making digital and omnichannel expansion a key priority. GIII's commitment to brand building, effective marketing, cost management and market expansion provides a solid foundation for sustained growth. The Zacks Consensus Estimate for GIII's current fiscal-year EPS has moved up 3.7% in the past 30 days to $4.16. Shares of G-III Apparel have gained 23.2% in the past six months.
Ralph Lauren: The Zacks Rank #2 (Buy) company is a major designer, marketer and distributor of premium lifestyle products. The company is on track to surpass its top and bottom-line targets under the "Next Great Chapter: Accelerate Plan." This initiative focuses on simplifying the global organizational structure and enhancing technological capabilities. Ralph Lauren's focus on product elevation, personalized and targeted promotions, disciplined inventory management, and a favorable channel and geographic mix positions it for continued success.
The company also actively invests in digital transformation and targeted marketing strategies. Its initiatives include expanding e-commerce platforms and leveraging AI for customer personalization. RL also focuses on geographic expansion, particularly in Asia and emerging markets, to capture growth opportunities. The Zacks Consensus Estimate for Ralph Lauren's current fiscal-year EPS has moved up 0.3% in the past 30 days to $11.74. Shares of RL have gained 35.8% in the past six months.
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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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