Zacks Industry Outlook Deckers, Tapestry, Abercrombie & Fitch and Torrid

Industry Overview - The Retail - Apparel and Shoes industry is facing challenges due to fluctuating consumer confidence and inflationary pressures, leading to weakened demand for apparel and footwear [2][8] - Retailers are dealing with rising operational costs, including increased wages and higher prices for goods and services, which complicates their ability to pass costs onto consumers [3] Industry Adaptation - Industry participants are adapting by focusing on robust product strategies, advancing omnichannel capabilities, and making prudent capital investments to meet evolving consumer demands [4][12] - Companies are enhancing consumer engagement through innovative products and personalized experiences, while also managing inventory and optimizing capital expenditures [11][12] Key Trends - Soft demand is expected to impact revenues, with a reported decline of 0.2% in sales at clothing and accessories stores in October [8] - Pressure on margins is anticipated to persist as companies invest heavily in digital infrastructure and marketing to remain competitive [9][10] Performance Metrics - The Zacks Retail - Apparel and Shoes industry has underperformed compared to the broader Zacks Retail-Wholesale sector and the S&P 500, with a growth of 16.3% over the past year compared to the S&P 500's 30% [19] - The industry is currently trading at a forward P/E of 15.92X, lower than the S&P 500's 22.28X and the sector's 23.94X [20] Company Highlights - Deckers Outdoor Corp.: The company is well-positioned for growth with a diverse brand portfolio and strong market trends, showing a sales growth estimate of 13.6% and an EPS growth of 12.6% [21][22] - Tapestry, Inc.: Focused on geographic expansion and digital innovation, Tapestry has a sales growth estimate of 1.4% and an EPS growth of 6.3% [23][25] - Abercrombie & Fitch Co.: The company integrates digital and physical retail experiences, with a sales growth estimate of 13.4% and an impressive EPS growth of 64.8% [26][28] - Torrid Holdings Inc.: Known for its leadership in the plus-size fashion market, Torrid has a significant EPS growth estimate of 81.8% [29][30]