Styling it right: Six fashion stocks that are hard to miss

The Dow Jones US Clothing and Accessories Index (DJUSCF) gave a 13.75% return YTD. It is because the clothing or fashion companies are witnessing a strong comeback from the pandemic recession. For instance, all major apparel businesses in the US are doubling down on production, from clothing, footwear to accessories, as customers flock to the stores. 

Fashion stocks have been hit hard in the previous year. But the robust jobs, income growth, and vaccinations this year are helping the sector to bounce back strong. The e-commerce boom is also helping them to keep up with orders.

Here we explore the top six fashion and clothing stocks in the US.

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Ralph Lauren Corporation (NYSE: RL)

The lifestyle company’s products include apparel, accessories, footwear, fragrance, and home décor products. The company has a market capitalization of US$8.86 billion.

Its revenue for the quarter ended June 26, 2021, was US$1,376 million compared to US$488 million in the previous year. The net income booked was US$165 million or US$2.18 per share diluted compared to the net loss of US$128 million or US$1.75 per share diluted in the previous year’s June quarter.

Its P/E ratio is 53.56, and the forward P/E one year is 17.17. RL’s dividend yield is 2.33%, and its annualized dividend is US$2.75.

The stock closed at US$120.50 on Aug 24, 2021, with a 14.81% gain YTD.

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Dick's Sporting Goods Inc (NYSE: DKS)

The sporting goods and apparel company has around 731 stores in its name and 126 stores in the name of Golf Galaxy and Field & Stream. It has a market cap of US$10.2 billion.

The net sales for the second quarter ended July 31, 2021, were US$3.27 billion compared to US$2.7 billion in the previous year’s comparative period. The net income was US$496 million or US$4.53 per share diluted compared to US$277 million or US$3.12 per share diluted in the previous year’s quarter.

The company raised its full-year 2021 earnings guidance to around US$11.0 to US$11.45 per share diluted. Dick’s P/E ratio is 10.81, and the forward P/E ratio one year is 12.60. In addition, the dividend yield is 1.3%, and the annualized dividend is US$1.45.

The stock closed at US$114.39 on Aug 24, 2021. The stock grew by 137.09% YTD.

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Target Corporation (NYSE: TGT)

The general merchandise retailer has a market cap of US$123 billion. This week, the company announced the return of Bullseye's Top Toys, available at 160 Disney shops at Target locations.

The revenue for the second quarter ended July 31, 2021, was US$25.16 billion compared to US$22.98 billion in the prior year. The net income for the period was US$1.8 billion or US$3.65 per share diluted compared to US$1.7 billion or US$3.35 per share diluted for the July quarter of 2020.

TGT has a P/E ratio of 20, and a forward P/E one year of 19.61. Its dividend yield is 1.43%, and the annualized dividend is US$3.60.

The stock closed at US$250.65 on Aug 24. Its stock price increased by 42.38% YTD.

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Nike, Inc. (NYSE: NKE)

Nike, the athletic footwear and apparel brand, designs and markets sports equipment and accessories. Its market capitalization is US$270 billion.

Nike will release its first-quarter results on Sep 23, 2021.

It announced its fiscal year ended May 31, 2021, results on July 20. The revenue for FY 2021 was US$44.5 billion compared to US$37.4 billion in FY 2020. It booked net income of US$5.7 billion or US$3.56 per share diluted compared to US$2.54 billion or US$1.60 per share diluted in FY 2020.

It has a P/E ratio of 47.81, the forward P/E one year of 39.53, a dividend yield of 0.65%. It pays an annualized dividend of US$1.10.

The stock grew 20.32% YTD and closed at US$169.98 on Aug 24, 2021.

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Carter's, Inc. (NYSE: CRI)

The babies and children apparel company Carter Inc. sources most of its products from manufacturers in Asia. The market capitalization of the company is US$4.6 billion.

Its net sale for the quarter ended July 3, 2021, was US$746 million compared to US$515 million in the previous year’s quarter. The net income was US$71.6 million or US$1.62 per diluted share compared to US$8.16 million or US$0.19 per diluted share.

It has a P/E ratio of 13.7, the forward P/E one year of 14.69, and a dividend yield of 1.51%. It pays an annualized dividend of US$1.60.

The stock rose nearly 12.12% YTD and closed at US$107.09 on Aug 24.

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lululemon Athletica inc. (NASDAQ: LULU)

Lululemon, the athletic apparel and accessories maker, has a market capitalization of US$54.85 billion. Its P/E ratio is 75.17, and forward P/E for one year is 57.15.

The company will announce its second-quarter results on Sep 8, 2021.

Its revenue and net income for the quarter ended May 2, 2021, was US$1.2 billion and US$145 million, respectively. The revenue and net income for the comparative quarter of 2020 were US$652 million and 28.6 million, respectively. 

The stock grew 17.05% YTD and closed at US$405.8 on Aug 24, 2021.

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Bottomline

The apparel companies, mainly those on e-commerce platforms, are seeing considerable sales growth in recent times. The summer travels, jobs and income growth in the recent months are helping accelerate revenue collections.