Home / Knowledge / News / Textiles / US apparel and footwear industry outlook drops to stable
US apparel and footwear industry outlook drops to stable
06
Oct '15
The dollar's strength has meant bad news for America's apparel and footwear industry. According to Moody's Investors Service, the outlook for the US apparel and footwear industry has changed to stable from positive as sales and earnings took a hit from the stronger dollar.

"While the hedges taken this year will partially protect margins, the strong US dollar will continue to have negative foreign currency translation effects on the industry's gross profits for the rest of this year," said Scott Tuhy, a Moody's Vice President - Senior Credit Officer.
"The strong dollar has discouraged spending by tourists to the US, impacting sales at brands such as Ralph Lauren and Calvin Klein, dragging on apparel sales."

The industry's performance in the first half of 2015 was slightly weaker than expected due to high negative foreign exchange translation, weak tourist sales in the US, delays in shipment from West Coast port disputes and bad weather, according to the report, "US Apparel and Footwear Industry: Cutting Outlook to Stable As Stronger Dollar Takes a Toll on Earnings."

Moody's expects constant currency operating income growth to weaken to 3-5 per cent in 2016 from 5-7 per cent in 2015 as hedges at favorable rates roll off. The rating agency thinks the industry will be challenged to fully raise prices to offset higher costs at current exchange rates, which will result in overall industry margins falling around 40 basis points in the next year.

However, the industry's overall revenue growth will remain at a moderate 4-6 per cent through 2016 as companies see returns on their investments in direct-to-consumer and international markets.

"Apparel companies will also continue to benefit from low cotton and oil prices this year, which could help the industry's operating margins," added Tuhy. "However, these benefits have so far been offset by the negative foreign exchange effects." (SH)

Fibre2Fashion News Desk – India

Must ReadView All

Textiles | On 10th Dec 2016

India’s 2016-17 cotton import to touch 17 lakh bales

The import of cotton from international markets by spinning mills in...

Textiles | On 10th Dec 2016

US textile & apparel imports fall 6.50% in Jan-Oct ’16

The import of textiles and apparel by United States dropped 6.50 per...

Unipar Carbocloro plant in the city of Cubatão, São Paulo state. Courtesy: Wikipedia

Textiles | On 10th Dec 2016

Brazil’s CADE clears Solvay’s 70.59% stake sale in Indupa

Brazil’s administrative council for economic defence (CADE) has...

Interviews View All

Amit Jain
Shingora Textiles Ltd

‘In terms of fabric, the fastest growing category for us is a blend of...

Anshul Sood
Oceedee

‘Indian footwear market is nascent and largely a trend follower’

Shawn Honeycutt
Bolger & O'Hearn

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

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Kerem Durdag
Biovation II LLC

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

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

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
December 2016

December 2016

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search