Soaring prices have compelled consumers to cut back on their expenses. However, the demand for clothing and accessories remained stable. Moreover, according to Mastercard SpendingPulse, clothing is estimated to witness robust growth, with people returning to offices and choosing better outfits.
Apparel sales in August 2022 grew by 17% year-over-year. In addition, the increasing outdoor activity is an impetus for growth in the outdoor apparel sector.
According to Technavio, the outdoor apparel market is projected to grow at a CAGR of 5.3% from 2021 to 2026. Also, online apparel sales continue to witness a significant uptrend owing to sheer convenience.
Given the backdrop, quality apparel stocks Hugo Boss AG (BOSSY) and J. Jill, Inc. (JILL) could be ideal additions to your portfolio. However, Hanesbrands Inc. (HBI) might be best avoided, given its bleak fundamentals.
Stocks to Buy:
Hugo Boss AG (BOSSY)
Headquartered in Metzingen, Germany, BOSSY and its subsidiaries create, develop, and distribute clothing, shoes, and accessories for men and women worldwide. It sells business, casual, athleisure, evening attire, shoes and accessories, licensed items, and children's apparel.
On August 3, 2022, Daniel Grieder, BOSSY's CEO, said, "We will continue to work rigorously on the execution of our 'CLAIM 5' growth strategy and pursue our ambition to become one of the top 100 global brands."
BOSSY's sales came in at €878 million ($848.70 million) for the second quarter ended June 30, 2022, up 39.6% year-over-year. Moreover, the company's net income came in at €60 million ($58 million), up 140% year-over-year. Also, its EPS came in at €0.83, up 144.1% year-over-year.
BOSSY's revenue is expected to increase 12% year-over-year to $3.43 billion in 2022. Over the past six months, the stock has gained 5.1% to close the last trading session at $10.51.
BOSSY's strong fundamentals are reflected in its POWR Ratings. The stock's overall A rating equates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
BOSSY has an A grade for Quality and a B grade for Growth, Value, and Stability. Within the Fashion & Luxury industry, it is ranked first among 67 stocks.
Beyond what is stated above, we've also rated BOSSY for Momentum and Sentiment. Get all BOSSY ratings here.
J. Jill, Inc. (JILL)
JILL operates as an omnichannel retailer for women's apparel under the J. Jill brand in the United States. The company offers knit and woven tops, bottoms, dresses, sweaters and outerwear, footwear, and accessories, including scarves, jewelry, and hosiery.
On September 1, 2022, Claire Spofford, JILL's President, and CEO, said, "We remain confident in our ability to deliver against our objectives and expect to leverage the operating disciplines and stronger foundation we now have in place to continue to drive results."
Also, on August 4, 2022, JILL launched its Welcome Everybody, a new shopping experience online and in stores celebrating women's inclusivity worldwide. This new venture is expected to offer women a plethora of new products, thereby fostering company sales.
JILL's net sales came in at $160.34 million for the second quarter ended July 30, 2022, up marginally year-over-year. Its net income came in at $17.81 million, compared to a loss of $24.65 million in the previous period. Moreover, the company's EPS came in at $1.25, compared to a loss per share of $1.98 in the prior-year period.
Street expects JILL's revenue to increase 4% year-over-year to $608.80 million in 2023. It surpassed EPS estimates in each of the four trailing quarters. Its EPS is expected to increase 26.8% year-over-year to $2.70 in 2023. Over the past six months, the stock has gained 11.3% to close the last trading session at $16.63.
JILL's overall A rating equates to a Strong Buy in our POWR Ratings system. It has an A grade for Sentiment and Quality and a B grade for Value. The stock is ranked #2 in the same industry.
We've also rated JILL for Stability, Growth, and Momentum. Get all JILL ratings here.
Stock to Sell:
Hanesbrands Inc. (HBI)
Consumer goods company HBI designs, manufactures, sources, and sells a range of basic apparel for men, women, and children. The company operates through three segments: Innerwear; Activewear; and International.
HBI's net sales came in at $1.51 billion for the second quarter ended July 02, 2022, down 13.6% year-over-year. Its net income came in at $92.10 million, down 28.4% year-over-year, while its EPS came in at $0.26, down 29.7% year-over-year.
Analysts expect HBI's revenue to decrease 4.6% year-over-year to $6.49 billion in 2022. Its EPS is expected to decline 36.6% year-over-year to $1.16 in 2022. Over the past year, the stock has lost 60% to close the last trading session at $7.64.
HBI's overall D rating equates to a Sell in our POWR Ratings system. HBI has an F grade for Sentiment and a D for Growth. HBI is ranked #61 in the same industry.
Click here to access the additional POWR Rating for HBI (Value, Stability, Quality, and Momentum).
BOSSY shares were unchanged in after-hours trading Monday. Year-to-date, BOSSY has declined -16.57%, versus a -22.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
2 Apparel Stocks to Buy in 2022 and 1 to Sell StockNews.com
