The Zacks Textile – Apparel industry, which is part of the broader Consumer Discretionary sector, currently ranks in the Top 14% of the Zacks classified industries. Players in this industry are benefiting from solid digital and omni-channel capabilities as well as brand-enhancement efforts. Companies are constantly trying to make the most in this tough operating environment.

Robust omni-channel capabilities, including enhancement of physical and digital foothold, effective marketing strategies, improved merchandise offerings and strategic cost-containment efforts have been the major propellants for the players in this space. Apart from e-commerce strength, improved traffic trends at brick-and-mortar stores with outlets opening up have been yielding results of late. These tailwinds are most likely to have contributed to the companies’ top line in the to-be-reported quarter.

On the contrary, a COVID-triggered tough operating landscape grappling with the industry-wide supply-chain bottlenecks, inflationary headwinds, labor shortages and freight charges have been deterrents. Clearly, these factors might have put pressure on the margins and profitability for the quarter under review.

The latest Earnings Preview indicate that the fourth-quarter Consumer Discretionary sector’s earnings are expected to surge 48.3% from the year-ago quarter’s reported figure, while revenues are anticipated to increase 16.3%.

Let’s take a closer look at the three Textile-Apparel stocks, slated to release respective December- quarter results on Feb 3.

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s in the Cards for Ralph Lauren?

Ralph Lauren (RL Quick QuoteRL - Free Report) is slated to report third-quarter fiscal 2022 results. This apparel and lifestyle products company is likely to beat on earnings for the quarter under review as RL has an Earnings ESP of +0.86% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for earnings is pegged at $2.18 per share, suggesting 30.5% growth from the year-ago quarter’s reported figure. The consensus mark for revenues is pegged at $1,642 million, indicating 14.3% growth from the year-ago quarter’s tally.

Robust consumer demand for casual bottoms, sweaters and fleece coupled with outstanding digital and omni-channel capabilities might have aided Ralph Lauren’s third-quarter performance. Improved pricing and promotions, and a better product mix are other tailwinds. On the last reported quarter’s earnings call, management predicted revenue growth of 14-16% from the year-ago period’s actuals in constant currency for third-quarter fiscal 2022, including a favorable currency impact of 140 basis points. The operating margin is forecast to be 13-13.5%, with a slight expansion in the gross margin. (Read More: Here's Why Ralph Lauren is Poised for Earnings Beat in Q3)

What Awaits Columbia Sportswear?

Columbia Sportswear (COLM Quick QuoteCOLM - Free Report) is likely to see top- and bottom-line improvement when it reports fourth-quarter 2021 earnings. Although COLM has an Earnings ESP of +3.37%, its Zacks Rank #4 (Sell) leaves surprise prediction inconclusive. The Zacks Consensus Estimate for quarterly revenues is pegged at $1,060 million, indicating an improvement of 15.7% from the year-ago quarter’s reported figure. The consensus mark for fourth-quarter earnings per share currently stands at $1.78, suggesting a sharp increase from $1.44 per share earned in the year-earlier period.

Sturdy consumer demand, innovative product pipeline, planned price increase and better inventory management are likely to have contributed to Columbia Sportswear’s quarterly performance. This designer, marketer and distributor of outdoor, active, and everyday lifestyle apparel, footwear and accessories is steadily gaining from its enhancing digital and analytics capabilities as well as improving direct-to-consumer operations. However, the ongoing supply-chain woes are major concerns. (Read More: Columbia Sportswear to Post Q4 Earnings: Factors to Note)

What’s in the Offing for Hanesbrands?

Hanesbrands’ (HBI Quick QuoteHBI - Free Report) bottom line is likely to have grown in the fourth quarter of 2021 from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for quarterly earnings is pinned at 44 cents per share, suggesting growth of about 15.8% from the year-earlier period’s figure. The Zacks Consensus Estimate for revenues is pegged at $1,748 million, suggesting a fall of nearly 3% from the prior-year quarter’s tally. Our model shows that HBI is unlikely to beat on earnings this season with an unfavorable combination. Although HBI’s Earnings ESP of +0.92% is favorable, a Zacks Rank of 4 for the company is leaving surprise prediction inconclusive.

This designer, manufacturer and seller of apparel is gaining from a growing e-commerce channel. Hanesbrands has been investing in technology, data science and core digital capabilities to deliver online growth. Strength in its Full Potential plan, designed around four pillars, such as growing global Champion, re-igniting innerwear growth, driving consumer-centricity and focusing on the portfolio bodes well. For fourth-quarter 2021, management projected net sales from continuing operations of $1.71-$1.78 billion. The mid-point of the guidance suggests net sales growth of 3% from the year-ago period’s reading and includes an expected gain of $6 million from favorable currency movements. However, Hanesbrands is persistently struggling with broad-based inflation pressures and transportation bottlenecks. (Read More: Hanesbrands Queued Up for Q4 Earnings: Things to Note)

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