4 Textile-Apparel Stocks in Focus as Industry Trends Strengthen

Industry Overview - The Zacks Textile - Apparel industry is focused on manufacturing, designing, distributing, and selling apparel, footwear, and accessories for both men and women, including fashion and athletic wear [3] - Companies in this industry are enhancing their omnichannel frameworks, integrating physical retail with digital platforms to improve customer engagement as consumers prefer online and hybrid shopping experiences [1] Current Trends - Improved store traffic and strong digital trends are prompting companies to invest in enhancing customer experiences across all touchpoints, revitalizing brick-and-mortar sales while leveraging e-commerce growth [4] - Companies are expanding fulfillment capabilities and offering flexible options like buy online, pick up in-store, and curbside delivery to meet rising consumer expectations for speed and convenience [5] - The adoption of AI technologies is optimizing customer interactions and improving inventory management, leading to greater efficiency and customer engagement [5] Brand Strategies - Companies are focusing on brand-enhancing strategies through diverse marketing efforts, licensing agreements, acquisitions, and partnerships, with continuous product innovation being essential for competitiveness [6] - Strategic brand investments are helping companies remain resilient despite near-term margin challenges from higher marketing spend and promotional intensity [2] Cost Challenges - The industry faces challenges related to elevated input costs, which may impact profitability, alongside increased selling, general, and administrative costs due to marketing investments [7] - Shipping disruptions and a competitive labor market are additional factors that could squeeze profit margins for companies in this sector [7] Industry Performance - The Zacks Textile - Apparel industry currently holds a Zacks Industry Rank of 46, placing it in the top 19% of over 243 Zacks industries, indicating positive near-term prospects [8][9] - The industry's consensus earnings estimate for the current financial year has improved by 1% since October 2025, reflecting a positive aggregate earnings outlook [10] Market Comparison - Over the past six months, the Zacks Textile - Apparel industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500, declining by 6.9% compared to the sector's 2.2% drop and the S&P 500's 17.3% increase [11] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 16.39X, lower than the S&P 500's 23.35X and the sector's 18.56X, with historical trading ranges between 12.76X and 32.36X over the past five years [14] Notable Companies - Crocs: A Zacks Rank 1 (Strong Buy) company focusing on sustainable growth through brand relevance and product innovation, with a current fiscal EPS estimate of $12.13 [18][20] - G-III Apparel: A Zacks Rank 2 (Buy) company expanding its brand portfolio and enhancing digital capabilities, with a current fiscal EPS estimate of $2.88 [23][25] - Ralph Lauren: A Zacks Rank 3 (Hold) company on track to meet revenue and profit goals through its "Next Great Chapter: Accelerate Plan," with a current fiscal EPS estimate of $15.41 [28][30] - V.F. Corp: A Zacks Rank 3 company focusing on brand building and operational performance improvements, with a current fiscal EPS estimate of $0.71 [33][35]