The Apparel Space is Primed in 2023 (LULU, TJX, SFIX, AEO, GPS, IGPK, URBN, FTCH, SNDL, TCNNF, CRLBF)

The bear grew angry on Wall Street in 2022, but that's when savvy investors should be busy making shopping lists to pick up exposure to long-term growth opportunities currently on sale.

Every time the blood flows on the Street most market participants make the mistake of getting swept up in crowd psychology, rather than coldly and rationally scanning for deep discounts on high quality names with strong growth prospects.

When we see big swings to the downside, and fear rules the tape, that's the only time you are ever going to have the chance to pick up exposure to interesting stocks without paying a premium.

One area that could be increasingly interesting right now is the trendy apparel space.

Sales of apparel took a hit during the pandemic, but that could ultimately be a story of pent-up demand as we move into the future. During the pandemic, people engaged in far fewer social activities and spent more time at home.

Now, as the world reopens (including in China... Finally), it's time to play catch-up in terms of consumer demand. That could bode extremely well for apparel names in the quarters ahead.

The revenue of the global apparel market was calculated at USD$1.5 trillion in 2021 and was predicted to increase to approximately USD$2 trillion by 2026. The United States and China account for most of this apparel demand.

With that in mind, we take a look at some of the most interesting stories in the apparel space below.

lululemon athletica inc. (Nasdaq:LULU) engages in the designing, distributing and retail of athletic apparel and accessories. It operates through the following business segments: Company-Operated Stores, Direct to Consumer.

The Company-Operated Stores segment comprises lululemon and ivivva brands; and specialize in athletic wear for female youth. The Direct to Consumer segment is involved in the e-commerce business, building brand awareness, particularly in new markets.

lululemon athletica inc. (Nasdaq:LULU) recently announced that, for the fourth quarter of fiscal 2022, the Company now expects that net revenue will be in the range of $2.660 billion to $2.700 billion, representing a 25%-27% increase compared to the fourth quarter of fiscal 2021. The previous guidance range was $2.605 billion to $2.655 billion. Diluted earnings per share are now expected to be in the range of $4.22 to $4.27 for the fourth quarter of fiscal 2022 compared to the Company's previous guidance range of $4.20 to $4.30.

Calvin McDonald, Chief Executive Officer, commented: "We are pleased with our continued revenue growth and momentum in the business, as our teams navigate a dynamic macro-backdrop. In Q4, traffic remains strong across both physical and digital channels, and we anticipate delivering another quarter of solid earnings growth consistent with our updated EPS forecast. 2022 has been a strong year for lululemon, and we remain focused on the significant opportunities ahead as we continue to deliver on our Power of Three x2 growth plan."

Even with that news, the action hasn't really heated up in the stock, with shares moving net sideways over the past week. Shares of the stock have powered higher over the past month, rallying roughly 4% in that time on strong overall action.

lululemon athletica inc. (Nasdaq:LULU) managed to rope in revenues totaling $1.9B in overall sales during the company's most recently reported quarterly financial data — a figure that represents a rate of top line growth of 28%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($352.6M against $1.3B, respectively).

Integrated Cannabis Solutions Inc. (OTC US:IGPK) is an interesting speculative OTC name that has started to make some waves in the apparel space. The company has a legacy cannabis infrastructure but has been moving toward a more diversified strategy, with apparel ranking as one of its primary areas of interest.

The big point here - and why we included this OTC name - is that IGPK is massively undervalued when you consider its actual operating metrics, based on twitter releases from the company.

Integrated Cannabis Solutions Inc. (OTC US:IGPK), specifically, recently put out an update, noting that "Effective December 27, 2022, Gene Caiazzo became our sole Officer and the Chairman of the Board. Mathew Dwyer resigned from all positions and is no longer an Officer or Director of the Company."

According to the company's release, Gene Caiazzo brings his strengths as a Chief Operating Officer to the Company. Five years ago, he purchased two entities to create Consolidated Apparel, Inc., has consistently increased sales while cutting costs, and brings true business operational experience to directing the Company's operations.

IGPK also noted a string of strong achievements that suggest the company is headed in the right direction, including the closure of its Consolidated Apparel transaction, the stock's shift from 'shell' status on the OTC, the completion of its asset acquisition with MTO, the filing of a name change with FINRA, fully executed acquisition agreements with Houdini Lab, Genesis Distribution, and Phoenix Delivery, current revenues up to $1.5 million, estimates for $7.5 million in revenues this quarter based on acquisitions, and management's sense that total 2023 revs could top $19 million.

Integrated Cannabis Solutions Inc. (OTC US:IGPK) is ultra-cheap on a top-line valuation basis. The stock has not reacted to recent moves from the company. Perhaps that is to be expected on the OTC. But therein lies the potential opportunity. The pivot is in place. The topline skew to share pricing is there. It's one to watch.

We would also note that IGPK continues to have operations in the cannabis space as well, tying it to names like SNDL Inc. (Nasdaq:SNDL), Trulieve Cannabis Corp. (OTC US:TCNNF), and Cresco Labs Inc. (OTC US:CRLBF).

Gap Inc. (NYSE:GPS) operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children. The firm operates through the following segments: Gap Global, Old Navy Global, Banana Republic Global, Athleta, and Other.

The Gap Global segment includes apparel and accessories for men and women under the Gap brand, along with the GapKids, BabyGap, GapMaternity, GapBody, and GapFit collections. The Old Navy Global segment offers clothing and accessories for adults and children. The Banana Republic Global segment provides clothing, eyewear, jewelry, shoes, handbags, and fragrances. The Athleta segment offers fitness apparel for women.

Gap Inc. (NYSE:GPS) recently announced a partnership with Ouigi Theodore, founder and creative director of The Brooklyn Circus - a Haitian-owned, historically inspired prep wear brand that exists as a staple for cultural tastemakers and fashion connoisseurs alike. The limited-edition Gap Ã? The Brooklyn Circus capsule launches on January 31st available to shop on both brand websites, in select Gap stores, as well as The Brooklyn Circus flagship store in Boerum Hill, Brooklyn, NY.

"Style is an opportunity for us to be honest. Classics are the foundation of what we do at The Brooklyn Circus and Gap is so known for that classic Americana style," says The Brooklyn Circus Founder and Creative Director, Ouigi Theodore. "Gap has always been in my history, which is where I find inspiration for our designs. We took our graphic elements and brought that explosion of energy and culture to iconic Gap styles. I'm proud of what we've put together and honored to launch a campaign with Gap that highlights various communities."

And the stock has been acting well over recent days, up something like 7% in that time. Shares of the stock have powered higher over the past month, rallying roughly 20% in that time on strong overall action.

Gap Inc. (NYSE:GPS) managed to rope in revenues totaling $4B in overall sales during the company's most recently reported quarterly financial data — a figure that represents a rate of top line growth of 2.4%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($680M against $3.4B, respectively).

Other names in the trendy apparel market include TJX Cos. (NYSE:TJX), Stitch Fix Inc. Cl A (Nasdaq:SFIX), American Eagle Outfitters Inc. (NYSE:AEO), Urban Outfitters Inc. (Nasdaq:URBN), and Farfetch Ltd. Cl A (NYSE:FTCH).

The post The Apparel Space is Primed in 2023 (LULU, TJX, SFIX, AEO, GPS, IGPK, URBN, FTCH, SNDL, TCNNF, CRLBF) appeared first on Wall Street PR.

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