Buy These 4 Textile - Apparel Stocks Ahead Of Q4 Earnings
Zacks Investment Research | Jan 22, 2019 07:34AM ET
The fourth-quarter earnings season has kick started, with initial results indicating that the momentum has toned down from the first three quarters of 2018. Earnings announcements are generally an important aspect of any individual’s investment decision. One industry that has been consistently putting up a good earnings show is Zacks Consumer Discretionary sector and the S&P 500 index in the past year. The stocks in the industry have rallied 7.5% in a year compared with 10.1% decline for the broader sector and 5.9% for the S&P 500. Furthermore, the industry is placed among the top 21% (52 out of the 257 Zacks industries).
Industry Vs. S&P 500 & Sector
Factors Likely to Influence Q4 Performance of Industry Players
Players in the Textile - Apparel space are poised for a stellar show, if we go by their upbeat guidance. This confidence comes from the participants’ stringent focus on improving product and brand offerings through an impressive product mix, alliances and buyouts, licensing agreements, constant innovation and marketing initiatives. Further, these companies remain focused on enhancing the omni-channel experience by bringing improvements to its websites as well as stores. Further, strides to expand globally provide a solid business foundation while enabling to seek opportunities, especially in underpenetrated markets.
However, investments in brand extensions and e-commerce growth have lately been hurting margins of these companies. Further, stiff competition, volatile currency and the potential tariff impacts due to the U.S.-China trade war, may deter growth of these companies. Nonetheless, rigorous cost-cutting and restructuring efforts are likely to help battle margin woes stemming from rising operating costs and increased marketing investments.
Moreover, robust expectations for the broader Consumer Discretionary sector, per the latest Zacks Investment Research
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