{"id":21918,"date":"2023-06-13T06:12:58","date_gmt":"2023-06-13T10:12:58","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/tjx-nordstrom-and-other-places-to-find-value-in-apparel-stocks\/"},"modified":"2023-06-13T06:12:59","modified_gmt":"2023-06-13T10:12:59","slug":"tjx-nordstrom-and-other-places-to-find-value-in-apparel-stocks","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=21918","title":{"rendered":"TJX, Nordstrom and Other Places to Find Value in Apparel Stocks"},"content":{"rendered":"
\n
<\/p>\n
<\/p>\n
<\/div>\n<\/figure><\/div>\n

Things are looking rather glum for apparel stocks in the wake of a lackluster earnings season. <\/p>\n

Consumers are spending less on discretionary purchases, and retailers are taking note. Many apparel companies\u2014including
\n Under Armour
\n (ticker: UAA) and
\n Ross Stores
\n (ROST)\u2014lowered their projections for the next few quarters and warned of a sales slowdown ahead. <\/p>\n

\n

The pessimism has taken a toll on retail stocks. The
\n SPDR S&P Retail ETF
\n (XRT) is up just 1.5% this year, underperforming the
\n S&P 500
\n \u2018s 12% gain. <\/p>\n

But for those willing to sort through the recent wreckage, there are still opportunities to be found at varying levels of risk, wrote Simeon Siegel, analyst at BMO Capital Markets. <\/p>\n

Siegel points to
\n T.J. Maxx
\n parent company
\n TJX
\n (TJX). TJX beat earnings expectations and grew same-store sales at a faster rate than analysts expected. While the company provided weak second-quarter guidance, it raised its fiscal-year projections. TJX is also the only off-price retailer with gross margins above prepandemic levels, Siegel notes.<\/p>\n

Barron\u2019s<\/em> made the case in favor of buying TJX earlier this year, arguing that the company\u2019s budget-friendly offerings should resonate with shoppers grappling with inflation. At a 21.5 price to earnings ratio, the stock currently trades a sliver below its historical average of 22.8. <\/p>\n

For those with a risk-on appetite,
\n Capri Holdings
\n (CPRI) could be a good bet, Siegel wrote. Not because the company\u2019s last earnings report gave investors much to celebrate\u2014it didn\u2019t\u2014but rather because its cheap valuation presents a good entry point for a stock he believes has room to outperform in the long run. <\/p>\n

Capri stock is down 35% this year, and changes hands at six times forward earnings, below its average multiple of nine and well below its peers. Competitor
\n Tapestry
\n (TPR), for instance, changes hands at 10.1 times forward earnings. Capri is also a standout within Siegel\u2019s area of coverage, with gross margins gaining over five percentage points over the past four years even as sales fell by roughly one percentage point during the same period. <\/p>\n

Other cheap apparel stocks the analyst highlighted were
\n Nordstrom
\n (JWN),
\n Victoria\u2019s Secret
\n (VSCO), and The North Face parent company
\n VF
\n (VFC), which all trade below 10 times forward earnings. Siegel has a Market Perform rating on
\n Nordstrom
\n and VF, and an Outperform rating on
\n Victoria\u2019s Secret.<\/span>\n <\/p>\n

Write to Sabrina Escobar at sabrina.escobar@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Things are looking rather glum for apparel stocks in the wake of a lackluster earnings season. Consumers are spending less on discretionary purchases, and retailers are taking note. Many apparel companies\u2014including Under Armour (ticker: UAA) and Ross Stores (ROST)\u2014lowered their projections for the next few quarters and warned of a sales slowdown ahead. The pessimism […]<\/p>\n","protected":false},"author":1,"featured_media":21919,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-21918","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nTJX, Nordstrom and Other Places to Find Value in Apparel Stocks | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Things are looking rather glum for apparel stocks in the wake of a lackluster earnings season. 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