Most retail investors are aware of the beatings the retail sector has endured over the course of the past year. To put this into perspective, according to BankruptcyData.com, there have been more than 300 retailers that have sought the protection of bankruptcy courts in 2017. Additionally, more stores are closing their doors in 2017 than ever before – and the year isn’t even over yet.
Regardless, not every apparel retailer has death knocking on its door. Of course, they might feel a bit of competitive pressure from Amazon (NASDAQ:$AMZN) and the transition by consumers to e-commerce sales, but H&M (NASDAQOTH:$HNNMY), L Brands (NYSE:$LB), and Nordstrom (NYSE:$JWN) still have life left in them.
Without further adieu, here are the top 3 apparel stocks to purchase in 2017:
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H&M (STO:$HM-B)
It’s not a surprise that H&M is at the top of this list. For years H&M has captivated consumers with their ability to take trends from the runways and turn them into profitable, economical clothes in a matter of weeks. Just by keeping up with the latest trends in the sector H&M has become the second largest clothing retailer in the world.
H&M’s growth has been so predictable in the past that even though it posts high sales numbers, analysts continue to raise the bar for it. Despite its May sales numbers being up 4% on a currency-adjusted basis, and June sales were 7% higher, H&M still missed Wall Street’s forecast of 6% and 8%.
Mentioned previously, H&M is feeling competitive pressure from the bricks-and-mortar retail experience, and it said that it would be “tough” to reach its previous growth estimates of 10-15% in 2017, despite operating earnings increased 10% in Q2. That said, H&M might still get a profit boost from a new innovation it launched earlier this year called Arket.
All in all, even though H&M’s stock has taken a few hits, it still continues to grow and remains a top apparel retailer.
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L Brands (NYSE:$LB)
Despite running into rough waters, L Brands stock still looks hopeful.
Right now, L Brands biggest competitor in the lingerie department is American Eagle Outfitters (NYSE:$AEO), who gained traction at its Aerie division because of the popularity of the bralette amongst teens and young adults.
That said, even though L Brands stock has faced headwinds, it has rebounded, increasing 25% since April – and it might even go higher.
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Nordstrom (NYSE:$JWN)
Nordstrom is known for its in-store customer service, but it seems to have adopted that business model in the online world because its e-commerce sales have increased so strongly that they now represent nearly a quarter of all of its sales.
On the whole, Nordstrom is an intriguing investment option, with its stock up 25% over the past year (helped in part by the rumors that the retailer will go private). Many speculate that if one department store can pull through the retail crisis, it’s Nordstrom.
Featured Image: depositphotos/teamtime
