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The Zacks Analyst Blog Highlights Crocs, Under Armour, V.F, Ralph Lauren and Hanesbrands
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For Immediate Release
Chicago, IL – January 8, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Crocs, Inc. (CROX - Free Report) , Under Armour, Inc. (UAA - Free Report) , V.F. Corp. (VFC - Free Report) , Ralph Lauren Corp. (RL - Free Report) and Hanesbrands Inc. (HBI - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Forget Crocs, Bet On These 4 Top Consumer Discretionary Stocks
The Consumer Discretionary sector, comprising companies that sell non-essential goods and services, demonstrated notable resilience in 2024. Despite challenges stemming from persistent inflation and elevated interest rates, U.S. consumers continued to spend, propelling the sector. However, not all stocks in the sector kept pace with the sector's performance. One such stock is Crocs, Inc., which has a prominent position in the Textile - Apparel industry.
Crocs, known for its innovative and versatile footwear offerings, has faced unique challenges in an increasingly competitive and dynamic market environment.
Why CROX Struggled to Maintain its Rally?
Crocs has been facing significant challenges that make it a less compelling investment opportunity in the near term. Despite strong third-quarter 2024 results, Crocs' HEYDUDE brand underperformed and weighed on overall revenues. HEYDUDE revenues declined 17.4% year over year due to a 22.9% drop in wholesale revenues, a 9.3% decrease in direct-to-consumer (DTC) revenues and a 22.2% decline in comparable DTC sales.
While the decline in wholesale revenues aligned with the company's guidance, the unexpected drop in DTC revenues was attributed to a strategic shift from performance marketing to brand marketing. Although Crocs is making progress on initiatives to revitalize the HEYDUDE brand, the company acknowledged that its recent performance and the current operating environment suggest a longer-than-anticipated timeline for a turnaround.
Looking ahead, Crocs anticipates a relatively subdued consumer environment in the United States. It noted that the industry saw heightened promotional activities in China during the mid-season festival, reflecting a more conservative approach by China consumers. As a result, the company expects to see a greater pullback in major Tier 1 cities like Shanghai and Beijing.
Due to these factors, management provided a pessimistic outlook for the fourth quarter of 2024. The company anticipates the HEYDUDE brand's revenues to decline 4-6% in the fourth quarter, while revenues for the Crocs brand are expected to grow 2% year over year. Management anticipates enterprise revenues to remain flat or increase slightly year over year in constant currency. For the fourth quarter, international growth is projected to slow due to regulatory pressures in India, while North America faces challenges from selective consumer behavior and the timing of wholesale shipments.
For 2024, enterprise revenues are projected to increase 3% year over year in constant currency, which is at the lower end of the previously mentioned 3-5%. Revenues for the Crocs brand are expected to grow 8%, while HEYDUDE brand revenues are anticipated to decline 14.5% due to weaker-than-expected sellouts in both wholesale and digital channels.
Shares of this Zacks Rank #4 (Sell) company have declined 17.3% in the past three months against the Consumer Discretionary sector's gain of 8.7%.
How Crox is Setting Up for Future Success
Despite facing challenges, Crocs remains committed to its long-term growth strategy, focusing on enhancing brand awareness through iconic product lines, strategic investments in key markets and expanding its product range to attract more consumers. The company has seen success in boosting global brand desirability through high-profile collaborations, including with Bath & Body Works, Batman and McDonald's.
Crocs is also focusing on its Echo and in-motion product franchises with affordable, fashion-forward items, as well as launching innovative products like Pet Crocs. For the HEYDUDE brand, Crocs is addressing challenges by refining its brand perception, reducing excess inventory and narrowing its retail focus to premium markets while also increasing average selling prices to improve margins.
4 Better Consumer Discretionary Picks
For investors seeking growth and resilience, there are better options in the Consumer Discretionary space. Companies with established global brands, strategic expansions and innovative product lines are well-equipped to outperform. Let's explore four compelling stocks that offer stronger growth prospects and a more balanced approach than Crocs.
Under Armour, Inc. emerges as a compelling investment choice with its strategic focus on several key areas to drive long-term success. By enhancing brand strength, the company is looking to strengthen its market identity and appeal to a broader, more engaged consumer base. A major focus for Under Armour is refining product development to create a more athlete-focused lineup, aligning products with global and regional market demands.
Under Armour is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activities in the United States and internationally. UAA has a trailing four-quarter earnings surprise of 75.1%, on average. The Zacks Consensus Estimate for Under Armour's current fiscal-year sales and EPS implies declines of 10.6% and 50%, respectively, from the prior-year actuals. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
V.F. Corp. has seen strong performance, benefiting from its ongoing strategic initiatives, particularly the Reinvent transformation program. The company's efforts to strengthen brands like Vans and The North Face, reduce costs and enhance its balance sheet are promising.
V.F. Corp designs, manufactures and markets branded apparel and related products in the United States and internationally. This Zacks Rank #1 has a trailing four-quarter earnings surprise of 9.4%, on average. The Zacks Consensus Estimate for V.F. Corp's current fiscal-year sales and EPS implies declines of 8.4% and 34.1%, respectively, from the prior-year actuals.
Ralph Lauren Corp. focuses on strong brand equity, a diversified growth strategy and strength in the direct-to-consumer channel. Known for its premium lifestyle products, Ralph Lauren thrives in luxury and mid-tier markets, driven by its heritage and aspirational image. The company's solid price momentum reflects its resilience, supported by financial health, digital innovation and operational efficiency, positioning it well for continued growth.
Ralph Lauren, which designs, markets and distributes lifestyle products, currently carries a Zacks Rank #2 (Buy). RL has a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for Ralph Lauren's current fiscal-year sales and earnings indicates growth of 3.6% and 13.9%, respectively, from the prior-year reported levels.
Hanesbrands Inc. focuses on resilience in a challenging macroeconomic environment, driven by a significant transformation strategy. These efforts are positively impacting its results, with a clear path to continued margin improvement, cash generation, and debt reduction through 2025 and beyond. This transformation is key to enhancing financial stability, streamlining operations and boosting profitability. HBI's global, consumer-centric approach has led to market share gains, supported by innovations targeting younger consumers and expanding into permanent retail spaces.
Hanesbrands engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children in the United States and internationally. It has a Zacks Rank #2 at present. The Zacks Consensus Estimate for Hanesbrands' current fiscal-year earnings indicates growth of 550% from the year-ago period's reported figure. HBI has a trailing four-quarter average earnings surprise of 21.6%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights Crocs, Under Armour, V.F, Ralph Lauren and Hanesbrands
For Immediate Release
Chicago, IL – January 8, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Crocs, Inc. (CROX - Free Report) , Under Armour, Inc. (UAA - Free Report) , V.F. Corp. (VFC - Free Report) , Ralph Lauren Corp. (RL - Free Report) and Hanesbrands Inc. (HBI - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Forget Crocs, Bet On These 4 Top Consumer Discretionary Stocks
The Consumer Discretionary sector, comprising companies that sell non-essential goods and services, demonstrated notable resilience in 2024. Despite challenges stemming from persistent inflation and elevated interest rates, U.S. consumers continued to spend, propelling the sector. However, not all stocks in the sector kept pace with the sector's performance. One such stock is Crocs, Inc., which has a prominent position in the Textile - Apparel industry.
Crocs, known for its innovative and versatile footwear offerings, has faced unique challenges in an increasingly competitive and dynamic market environment.
Why CROX Struggled to Maintain its Rally?
Crocs has been facing significant challenges that make it a less compelling investment opportunity in the near term. Despite strong third-quarter 2024 results, Crocs' HEYDUDE brand underperformed and weighed on overall revenues. HEYDUDE revenues declined 17.4% year over year due to a 22.9% drop in wholesale revenues, a 9.3% decrease in direct-to-consumer (DTC) revenues and a 22.2% decline in comparable DTC sales.
While the decline in wholesale revenues aligned with the company's guidance, the unexpected drop in DTC revenues was attributed to a strategic shift from performance marketing to brand marketing. Although Crocs is making progress on initiatives to revitalize the HEYDUDE brand, the company acknowledged that its recent performance and the current operating environment suggest a longer-than-anticipated timeline for a turnaround.
Looking ahead, Crocs anticipates a relatively subdued consumer environment in the United States. It noted that the industry saw heightened promotional activities in China during the mid-season festival, reflecting a more conservative approach by China consumers. As a result, the company expects to see a greater pullback in major Tier 1 cities like Shanghai and Beijing.
Due to these factors, management provided a pessimistic outlook for the fourth quarter of 2024. The company anticipates the HEYDUDE brand's revenues to decline 4-6% in the fourth quarter, while revenues for the Crocs brand are expected to grow 2% year over year. Management anticipates enterprise revenues to remain flat or increase slightly year over year in constant currency. For the fourth quarter, international growth is projected to slow due to regulatory pressures in India, while North America faces challenges from selective consumer behavior and the timing of wholesale shipments.
For 2024, enterprise revenues are projected to increase 3% year over year in constant currency, which is at the lower end of the previously mentioned 3-5%. Revenues for the Crocs brand are expected to grow 8%, while HEYDUDE brand revenues are anticipated to decline 14.5% due to weaker-than-expected sellouts in both wholesale and digital channels.
Shares of this Zacks Rank #4 (Sell) company have declined 17.3% in the past three months against the Consumer Discretionary sector's gain of 8.7%.
How Crox is Setting Up for Future Success
Despite facing challenges, Crocs remains committed to its long-term growth strategy, focusing on enhancing brand awareness through iconic product lines, strategic investments in key markets and expanding its product range to attract more consumers. The company has seen success in boosting global brand desirability through high-profile collaborations, including with Bath & Body Works, Batman and McDonald's.
Crocs is also focusing on its Echo and in-motion product franchises with affordable, fashion-forward items, as well as launching innovative products like Pet Crocs. For the HEYDUDE brand, Crocs is addressing challenges by refining its brand perception, reducing excess inventory and narrowing its retail focus to premium markets while also increasing average selling prices to improve margins.
4 Better Consumer Discretionary Picks
For investors seeking growth and resilience, there are better options in the Consumer Discretionary space. Companies with established global brands, strategic expansions and innovative product lines are well-equipped to outperform. Let's explore four compelling stocks that offer stronger growth prospects and a more balanced approach than Crocs.
Under Armour, Inc. emerges as a compelling investment choice with its strategic focus on several key areas to drive long-term success. By enhancing brand strength, the company is looking to strengthen its market identity and appeal to a broader, more engaged consumer base. A major focus for Under Armour is refining product development to create a more athlete-focused lineup, aligning products with global and regional market demands.
Under Armour is one of the leading designers, marketers and distributors of authentic athletic footwear, apparel and accessories for a wide variety of sports and fitness activities in the United States and internationally. UAA has a trailing four-quarter earnings surprise of 75.1%, on average. The Zacks Consensus Estimate for Under Armour's current fiscal-year sales and EPS implies declines of 10.6% and 50%, respectively, from the prior-year actuals. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
V.F. Corp. has seen strong performance, benefiting from its ongoing strategic initiatives, particularly the Reinvent transformation program. The company's efforts to strengthen brands like Vans and The North Face, reduce costs and enhance its balance sheet are promising.
V.F. Corp designs, manufactures and markets branded apparel and related products in the United States and internationally. This Zacks Rank #1 has a trailing four-quarter earnings surprise of 9.4%, on average. The Zacks Consensus Estimate for V.F. Corp's current fiscal-year sales and EPS implies declines of 8.4% and 34.1%, respectively, from the prior-year actuals.
Ralph Lauren Corp. focuses on strong brand equity, a diversified growth strategy and strength in the direct-to-consumer channel. Known for its premium lifestyle products, Ralph Lauren thrives in luxury and mid-tier markets, driven by its heritage and aspirational image. The company's solid price momentum reflects its resilience, supported by financial health, digital innovation and operational efficiency, positioning it well for continued growth.
Ralph Lauren, which designs, markets and distributes lifestyle products, currently carries a Zacks Rank #2 (Buy). RL has a trailing four-quarter earnings surprise of 9.1%, on average. The Zacks Consensus Estimate for Ralph Lauren's current fiscal-year sales and earnings indicates growth of 3.6% and 13.9%, respectively, from the prior-year reported levels.
Hanesbrands Inc. focuses on resilience in a challenging macroeconomic environment, driven by a significant transformation strategy. These efforts are positively impacting its results, with a clear path to continued margin improvement, cash generation, and debt reduction through 2025 and beyond. This transformation is key to enhancing financial stability, streamlining operations and boosting profitability. HBI's global, consumer-centric approach has led to market share gains, supported by innovations targeting younger consumers and expanding into permanent retail spaces.
Hanesbrands engages in the design, manufacture, sourcing and sale of apparel essentials for men, women and children in the United States and internationally. It has a Zacks Rank #2 at present. The Zacks Consensus Estimate for Hanesbrands' current fiscal-year earnings indicates growth of 550% from the year-ago period's reported figure. HBI has a trailing four-quarter average earnings surprise of 21.6%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.