Zacks Industry Outlook Highlights lululemon Athletica, Crocs, Columbia Sportswear and G-III Apparel Group

Zacks Equity Research
9 min read

In This Article:

For Immediate Release

Chicago, IL – October 17, 2024 – Today, Zacks Equity Research discusses lululemon Athletica Inc. LULU, Crocs, Inc. CROX, Columbia Sportswear Co. COLM and G-III Apparel Group, Ltd. GIII.

Industry: Apparel

Link: https://www.zacks.com/commentary/2351189/4-textile---apparel-stocks-worth-watching-despite-industry-challenges

Companies in the Zacks Textile - Apparel industry are under pressure from a challenging consumer environment, as rising inflation has made consumers more selective with their spending. As a result, industry players are feeling the impact of decreased consumer demand. Many companies in the textile and apparel space are also struggling due to heightened SG&A expenses.

Despite the challenges, brand enhancement strategies — including innovations and improvements in both store and digital operations — keep lululemon Athletica Inc., Crocs, Inc., Columbia Sportswear Co. and G-III Apparel Group, Ltd. well-positioned.

About the Industry

The Zacks Textile - Apparel industry includes companies and lifestyle brands that manufacture, design, distribute, source, market and sell apparel, footwear, and accessories for men and women. These include fashion apparel like dresses, pants, skirts, shorts, shirts, jackets, blouses and knitwear, and intimate apparel like underwear and shapewear.

The industry also comprises companies offering apparel for a healthy lifestyle and athletic activities, such as yoga, running and training. Some companies also deal with fitness-related accessories like gloves, bags, headwear and sports masks.

Industry participants operate through direct-to-consumer (brick-and-mortar and online), wholesale and licensing distribution channels. Most players operate through stores and digital networks in the United States and internationally.

4 Trends Shaping the Future of the Textile - Apparel Industry

Tough Consumer Landscape: Textile-apparel companies are navigating a turbulent global retail environment, stemming from underlying inflationary pressures. This situation has led to a significant shift in consumer behavior, characterized by reduced spending on non-essential items and an increased focus on value. As consumers become more selective in their purchasing decisions, they are prioritizing essential goods amid elevated cost of living. This shift is putting considerable strain on demand dynamics for companies in the textile and apparel sector.

Cost Concerns: Textile-apparel companies are facing challenges related to elevated input costs, which continue to impact their profitability. Higher selling, general and administrative (SG&A) costs stemming from increased investments in marketing and enhancements to physical and digital retail channels are concerning. Many firms are vulnerable to shipping disruptions, which can result in delays and higher freight expenses, squeezing overall profit margins. The competitive labor market also adds another layer of difficulty, collectively posing threats to the profitability of these companies.

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