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The strong digital presence established by most apparel retailers has enabled them to rebound from their pandemic-lows, introduce new fashion in sync with the changing consumer trends, and expand their reach. Moreover, rising foot traffic, declining jobless claims, and increasing consumer spending led to strong retail sales. The National Retail Federation (NRF) forecasts holiday retail sales to rise between 8.5% -10.5% during November and December.
Although the recent breakout of the omicron coronavirus variant is expected to slow down foot traffic to the brick-and-mortar stores, e-commerce sales are to help the industry generate solid earnings this holiday season. Investors’ interest in retail stocks is evident from the SPDR S&P Retail ETF’s (XRT) 2.5% returns over the past month versus the SPDR S&P 500 Trust ETF’s (SPY) 1.2% gains. So, both LULU and ANF should benefit.
