The luxury industry is set for solid growth this year owing to the rising high-income population groups, increasing demand for luxury fashion products, digital transformation, and prevailing social media influence. Also, the recovering economy and improving job market are boosting customers' confidence.
Amid this backdrop, investors could consider investing in sound fashion & luxury stocks Crocs, Inc. (CROX), PVH Corp. (PVH), and H & M Hennes & Mauritz AB (publ) (HNNMY) for rising global wealth.
A strong, growing economy boosts consumer confidence in the market and results in higher spending and personal consumption of luxury items. Also, with changing consumer behaviors, a rising affluent consumer base, and a surge in desire for exclusivity, coupled with the increasing importance of brand value, the fashion and luxury market is expected to experience a robust growth trajectory.
With the expanding online shopping trends, rising disposable income, and focus on improved customer experience, retail sales are expected to hike strongly this year. The National Retail Federation forecasted retail sales to increase between 2.5% and 3.5%, totaling around $5.23 trillion and $5.28 trillion in 2024.
According to Fortune Business Insights, the global luxury goods market is expected to reach around $392.40 billion by 2030, expanding at a CAGR of 4.7% during the forecast period. The rising wealthy populations and the emergence of technology-embedded products are prominent trends setting the pace of the market.
Given these encouraging trends, let’s look at the fundamentals of the top three Fashion & Luxury, beginning with number 3.
Stock #3: Crocs, Inc. (CROX)
CROX designs, develops, manufactures, markets, distributes, and sells casual lifestyle footwear and accessories for men, women, and children under Crocs and HEYDUDE Brand internationally. It offers various footwear products, including clogs, sandals, slides, flips, wedges, platforms, socks, boots, charms, flip-flops, sneakers, and slippers.
CROX’s trailing-12-month EBIT margin and net income margin of 25.57% and 20.50% are 217.1% and 348% higher than the industry averages of 8.06% and 4.58%, respectively. Also, the stock’s trailing-12-month gross profit margin of 58.15% is higher than the 37.53% industry average.
For the third quarter that ended on September 30, 2024, CROX’s revenues rose 1.6% year-over-year to $1.06 billion, and its non-GAAP gross profit grew 5.5% year-over-year to $633.34 million. In addition, the company’s non-GAAP net income came in at $213.97 million and $3.60 per common share, up 6.8% and 10.8% year-over-year, respectively.
According to the financial outlook for the fourth quarter, CROX expects Crocs Brand to grow approximately 2% year-over-year. And its adjusted earnings per share is expected to range from $2.20 to $2.28.
Also, for the full year 2024, the company continues to expect revenue growth between 3% and 5% compared to 2023. Revenues from the Crocs Brand are projected to grow approximately 8%. The company updated its adjusted EPS to $12.82 to $12.90, at the high end of prior guidance of $12.45 to $12.90.
Street expects CROX’s revenue and EPS for the second quarter (ending June 2025) to increase 4.6% and 4.8% year-over-year to $1.16 billion and $4.20, respectively. Further, the company surpassed the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Shares of CROX have surged 27.6% over the past year to close the last trading session at $111.58.
CROX’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has a B grade for Quality. Within the B-rated Fashion & Luxury industry, CROX is ranked #15 among the 60 stocks.
Click here to access additional ratings of CROX for Momentum, Sentiment, Value, Growth, and Stability.
Stock #2: PVH Corp. (PVH)
PVH is an international apparel company. The company operates in Tommy Hilfiger North America; Tommy Hilfiger International; Calvin Klein North America; Calvin Klein International; and Heritage Brands Wholesale segments. It designs and markets men's, women's, and children's branded apparel, footwear and accessories, underwear, and sleepwear.
On August 7, PVH’s Board of Directors declared a quarterly cash dividend of $0.0375 per share paid on September 25, 2024, to stockholders of record on September 4, 2024. PVH pays an annual dividend of $0.15, which translates to a yield of 0.15% at the current share price. Its four-year average dividend yield is 0.12%.
During the second quarter that ended on August 4, 2024, PVH reported a total revenue of $2.07 billion, and its gross profit was $1.24 billion. The company’s earnings before interest and taxes rose 21.4% year-over-year to $173.90 million.
Also, the company’s net income came in at $158 million and $2.80 per common share, up 67.7% and 86.7% year-over-year, respectively.
Street expects PVH’s EPS for the first quarter (ending April 2025) to increase 13.9% year-over-year to $2.79. For the same quarter, the company’s revenue is expected to grow 0.8% year-over-year to $1.97 billion. Moreover, it has surpassed the consensus EPS estimates in all four trailing quarters.
PVH’s shares have gained marginally over the past month to close the last trading session at $98.86.
PVH’s POWR Ratings reflect its sound prospects. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
PVH has an A grade for Value and a B grade for Sentiment and Quality. It is ranked #7 out of 60 stocks in the B-rated Fashion & Luxury industry.
In addition to the POWR Ratings we’ve stated above, we also have other PVH ratings for Growth, Stability, and Momentum. Get all PVH ratings here.
Stock #1: H & M Hennes & Mauritz AB (publ) (HNNMY)
Headquartered in Stockholm, Sweden, HNNMY provides clothing, accessories, footwear, cosmetics, home textiles, and homeware for women, men, and children worldwide. The company offers its products under the H&M, H&M HOME, H&M Move, H&M Beauty, COS, Weekday, Monki, & Other Stories, ARKET, Afound, and Singular Society brand names.
On October 1, HNNMY introduced H&M Adorables, a new line of premium-quality clothing and accessories crafted with care and designed with longevity in mind. H&M Adorables was launched in selected stores and on hm.com from October 2024. It offers sophisticated silhouettes and a neutral palette, spanning newborn essentials and gifts and timeless babywear foundational pieces.
On July 9, ARKET, a modern-day market and lifestyle brand owned by HNNMY, opened two flagship stores in Milan and Barcelona. The stores carry the brand’s full assortment of ready-to-wear and accessories for women and men, children’s wear, body care, and interior design, with both being the first ARKET stores in Italy and Spain.
HNNMY’s net sales for the third quarter that ended August 31, 2024 stood at SEK 59.01 billion ($5.54 billion), and its gross profit was SEK 30.13 billion ($2.83 billion) for the same period. Furthermore, profit for the period attributable to shareholders of HNNMY and EPS came in at SEK 2.32 billion ($217.72 million) and SEK 1.44, respectively.
Street expects HNNMY’s revenue for the fourth quarter (ending November 2024) to increase 0.9% year-over-year to $6.08 billion. The company’s revenue for the fiscal year (ending November 2025) is expected to grow 3.5% year-over-year to $23.01 billion.
HNNMY’s stock has increased 18.6% over the past year to close the last trading session at $3.07.
HNNMY’s POWR Ratings reflect its sound fundamentals. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
HNNMY has an A grade for Quality and Stability. It is ranked #6 out of 60 stocks in the same industry.
In addition to the POWR Ratings we’ve stated above, we also have HNNMY ratings for Momentum, Value, Growth, and Sentiment. Get all HNNMY ratings here.
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HNNMY shares were trading at $3.04 per share on Wednesday afternoon, down $0.03 (-0.98%). Year-to-date, HNNMY has declined -10.99%, versus a 23.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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