Home / Knowledge / News / Apparel/Garments / US apparel & footwear industry to remain stable
US apparel & footwear industry to remain stable
03
May '16
The outlook for the US apparel and footwear industry remains stable owing to various growth strategies, and following a prior revision announced in October 2015, Moody's Investors Service has said in a report.

Moody's report is titled "US Apparel and Footwear Industry: Constant Currency Earnings Growth Will Remain Solid Through 2016."

"Larger companies continue to benefit from international and direct-to-consumer growth strategies, which has helped offset cost pressures stemming from the stronger dollar," noted Michael Zuccaro, Moody's AVP - Analyst.

As a result, Moody's has raised its 2016 constant currency operating income forecast to 4 per cent to 6 per cent from a previous forecast of 3 per cent to 5 per cent. If currencies remain unchanged next year, the ratings agency anticipates operating income growth to accelerate to 6 per cent to 8 per cent.

However, the cost of goods for international companies will increase as the favorable foreign exchange rate hedges entered into in 2014, prior to the substantial appreciation of the dollar, are unwound.

The hedges mitigate the effects of sourcing products from foreign manufacturers in US dollars and selling goods in foreign markets in local currency. To offset rising costs, larger international companies like Ralph Lauren Corporation (A2 Stable), V.F. Corporation (A3 Stable) , Levi Strauss & Co. (Ba1 Stable) and PVH Corp. (Ba1 Stable) have implemented price increases in selected international markets.

Other growth drivers for large apparel companies include an emphasis on direct-to-consumer ("DTC") channels via new stores or online. As well, consumer interest has been heightened in athletic apparel, producing opportunities for branded stores and underpinning sales for Nike, Inc. (A1 Stable), Hanesbrands, Inc. (Ba1 Stable), and V.F.

"Nike Brand grew DTC revenues 29 per cent in the 2016 third quarter, driven by 10 per cent comp store growth, 56 per cent growth in online sales and new store expansion. Its DTC revenues now account for 23.5 per cent, or nearly $7.5 billion, of total consolidated sales. VF grew DTC sales by 7 per cent in 2015, accounting for 27 per cent of revenue in the 4Q. In stark contrast, sales for department stores have declined 25 per cent since 2002," said Zuccaro.

Merger and acquisition activity is also likely as sector consolidation continues. Global expansion or moves into lifestyle categories will drive the momentum, the report said. (SH)

Fibre2Fashion News Desk – India

Must ReadView All

Courtesy: Ikea

Textiles | On 26th Apr 2017

Ikea’s product sourcing from India to double by 2020

Ikea, the global home furnishing giant from Sweden, plans to double...

Textiles | On 26th Apr 2017

CITA to add insufficiently available fabric in CAFTA-DR

The Committee for the Implementation of Textile Agreements (CITA) has ...

Courtesy: SKF

Textiles | On 26th Apr 2017

SKF brings predictive maintenance for machinery to India

SKF India, a global supplier of bearings, seals, mechatronics,...

Interviews View All

Karan Suratwala
Key Textile Accessories Private Limited

Chinese imports are destroying the supply chain

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search