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

Pic: Shutterstock

Apparel/Garments | On 20th Feb 2020

Bangla garment accessories sector may lose Tk 1500 cr

Bangladesh's garments accessories and packaging sector may incur a...

Pic: Shutterstock

Textiles | On 20th Feb 2020

CV outbreak lowered China's cotton consumption: USDA

The novel coronavirus (CV) outbreak and its potential ramifications...

Pic: paul prescott / Shutterstock.com

Textiles | On 20th Feb 2020

Sri Lanka's textile exports earn $5.596 bn in 2019

Sri Lanka’s earnings from textiles and garments exports increased by...

Interviews View All

Footwear industry, Head honchos

Footwear industry
Head honchos

There is rising demand for fancy, trendy and yet comfortable footwear

Office bearers, Textile industry

Office bearers
Textile industry

There might be negative impact on garment exports

Karin Ekberg, Leadership & Sustainability

Karin Ekberg
Leadership & Sustainability

Sustainable models are beneficial for brands, retailers and manufacturers

Arup Chakraborty,

Arup Chakraborty

Mirrorsize is a US-based start-up that provides artificial intelligence...

Rushiraj Mulani,

Rushiraj Mulani

The Shradhdha Group of companies was established in 2010 and is based out...

Franco Ravazzi,

Franco Ravazzi

Italy-based Tessimenti E Orditi Tinti (T.O.T SRL) specialises in stocking...

Frank Heislitz, Freudenberg

Frank Heislitz
Freudenberg

Freudenberg Performance Materials is a leading global manufacturer of...

Johan Berlin, InvestKonsult Sweden AB

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb
Brrr°

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Ruma Devi, Gramin Vikas Evam Chetna Sansthan

Ruma Devi
Gramin Vikas Evam Chetna Sansthan

Ruma Devi is a jet-setting promoter of artisans who has empowered...

Karan Arora, Karan Arora

Karan Arora
Karan Arora

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

Nisha Chanda, Whistling Woods International School of Fashion

Nisha Chanda
Whistling Woods International School of Fashion

<div>A lack of upgraded courses in costume designing and fashion as per...

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

Leave your Comments


February 2020

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


Advanced Search