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3 Sportswear Stocks to Buy as Q2 Earnings Season Heats Up

Benjamin Rains

 

Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains takes a look at three sportswear stocks to consider buying as the second quarter 2019 earnings season kicks off. Overall, more than 140 companies are set to report their quarterly results this week. This list features nearly 60 S&P 500 members, which includes IBM, Microsoft, Netflix, United Airlines, and more.

With this in mind, total second-quarter 2019 earnings for the S&P 500 index are expected to be down 3.4% from the year-ago period on +3.9% higher revenues. So, let’s take a look at three sportswear retail stocks that are set to see their earnings surge and look like buys heading into earnings.

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The first stock is Skechers U.S.A. SKX. The apparel and footwear firm is coming off record quarterly revenue in Q1 and currently boasts a Zacks Rank #2 (Buy) and a “B” grade for Momentum in our Style Scores system. SKX stock is up 123% during the last five years and over 50% in 2019. Skechers, which will be the first of these three companies to report, is set to release its second-quarter 2019 financial results after market closes on Thursday.

Moving on, Under Armour UAA is currently a Zacks Rank #1 (Strong Buy) that is projected to see its fiscal 2019 and 2020 earnings soar. UAA stock hit a new 52-week high on Monday and is now up 55% in 2019 to help it crush the S&P’s 19% climb and Nike’s NKE 21% jump. Under Armour has climbed recently as investors see promise in its restructuring plan and more. UAA is projected to release its quarterly results on July 25.

The episode then ends with a look at Lululemon LULU, as the athleisure giant continues its impressive tear. The company’s success and expansion has seen Nike, Adidas ADDYY, Puma, Gap GPS, L Brands’ LB Victoria’s Secret, and others roll out more complete athleisure’s lines for both men and women. The style and clothing that Lululemon helped popularize on the high-end has also sparked off-priced athleisure expansion from Target TGT and others.

The Vancouver-based company has also expanded its menswear business and bolstered its outwear offerings to better compete with the likes of Canada Goose GOOS and V.F. Corporation’s VFC The North Face. And Lululemon operates a mostly direct-to-consumer business, which is perfect in the Amazon AMZN age.

Lululemon’s positive earnings estimate revision activity helps the company earn its current Zacks Rank #2 (Buy). LULU is expected to be the last of these three companies to report its Q2 results, which are projected to come out in late August.

As a reminder, if you feel that we missed something, or if you have any topic suggestions, shoot us an email at podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcasts, and remember to subscribe and leave us a rating wherever you listen to your podcasts.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
The Gap, Inc. (GPS) : Free Stock Analysis Report
 
lululemon athletica inc. (LULU) : Free Stock Analysis Report
 
Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report
 
L Brands, Inc. (LB) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
Skechers U.S.A., Inc. (SKX) : Free Stock Analysis Report
 
Adidas AG (ADDYY) : Free Stock Analysis Report
 
NIKE, Inc. (NKE) : Free Stock Analysis Report
 
V.F. Corporation (VFC) : Free Stock Analysis Report
 
Under Armour, Inc. (UAA) : Free Stock Analysis Report
 
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