Despite macro headwinds, the fashion and apparel industry continues to see steady demand. According to Adobe Online shoppers spent a record $5.29 billion Thanksgiving 2022 saw a 2.9% year-over-year increase. They spent the most on toys, apparel, grills, and outdoor gear. “What we’re seeing is that the discounts are strong enough to entice consumers to continue spending,” said Vivek Pandia, chief analyst at Adobe.
This momentum is expected to continue through winter break.The National Retail Federation says holiday season sales Up to 8% this year.
Moreover, in today’s era of social media marketing, fast fashion is becoming more popular. The global fast fashion market Growing at a CAGR of 8.6% From 2022 to 2026.
Given the background, investors can buy quality fashion stocks J. Jill, Inc. (Jill) this holiday season. However, the fundamentally weak The Gap, Inc. (GPS) is best avoided.
Stock to buy:
J. Jill Co., Ltd. (Jill)
JILL operates as an omnichannel retailer of J. Jill branded women’s apparel in the United States. It offers two of his sub-brands, Pure Jill and Wearever, which extend the brand’s aesthetic.
Claire Spofford, President and CEO of JILL, said on December 6, 2022: Remain vigilant with our expectations related to consumers. ”
Jill’s forward EV/sales of 0.86x is 21.27% lower than the industry average of 1.09x. A forward price/sales multiple of 0.41 is 35.9% lower than the industry average of 0.86.
Trailing JILL – 12 months gross profit A margin of 68.49% is 93.4% higher than the industry average of 35.41%. Leveraged FCF margin for the last 12 months was 12.98%, 927.4% above the industry average of 1.26%.
JILL’s gross margin was $105.02 million for the third quarter ended October 29, 2022, slightly higher than the year-ago quarter. The company’s current assets stood at $184.68 million for the period ended October 29, 2022 compared to his $123.25 million for the period ended January 29, 2022. rice field.
Analysts expect JILL’s revenue to grow 4.4% to $610.7 million in 2023. His EPS is estimated to be $2.92 in 2023, up 37.1% year-over-year. Over the past year, the stock has gained 67.9% and closed its last trading session at $24.41.
JILL’s strong fundamentals are POWR ratingA stock’s overall B rating indicates a ‘buy’ on our proprietary rating system. POWR Ratings evaluate stocks by 118 different factors, each with its own weighting.
Jill gets an A grade for emotion and quality. Ranked 2nd out of 66 brands. fashion & luxury industry. click here To review JILL’s additional POWR ratings (Stability, Growth, Value, and Momentum).
Inventory to avoid:
Gap Co., Ltd. (GPS)
GPS is a specialist apparel company offering clothing, accessories and personal care products for women, men and children. This global omnichannel retailer sells products under the Old Navy, Gap, Banana Republic and Athleta brands.
GPS forward EV/EBIT of 141.29x is 1006.3% higher than the industry average of 12.77x. Future EV/EBITDA multiple of 18.06, 97.36% above the industry average of 9.15.
GPS’s 12-month EBITDA margin was 3.34%, 69.8% lower than the industry average of 11.05%. Over the last 12 months, the leveraged FCF margin was -5.29%, well below the industry average of 1.26%.
For the third quarter ended September 29, 2022, GPS gross profit was $1.51 billion, down 9.2% year-over-year. The company has total assets of $12 billion for the period ending October 29, 2022, compared to his $12.78 billion for the period ending October 30, 2021.
Street expects GPS revenue to fall 5.6% year-over-year to $15.74 billion in 2023. Over the past year, the stock has fallen 14.7% from his last trading session to close at $13.91.
GPS’s POWR rating is consistent with this grim outlook. The stock has an overall D rating, equivalent to Sell in our proprietary rating system. Additionally, the stock has a D for growth and stability.
Ranked 59th in the industry. We also rate GPS for Growth, Value, Momentum, Sentiment, and Quality. click here Access all GPS ratings.
Jill shares were trading at $23.93 a share Wednesday afternoon, down $0.48 (-1.97%). Year-to-date, JILL is up 24.77% of his, while the benchmark S&P 500 index is up -14.82% over the same period.
About the Author: RashmiKumari
Rashmi’s passion for capital markets, wealth management, and financial regulatory issues led her to pursue a career as an investment analyst. With a Master’s degree in Commerce, she aims to help individual investors understand complex financial issues and help them make sound investment decisions. more…