Berkeley: Profit margins in the apparel industry are expected to expand

Barclays s said clothing companies reduced inventories in the fourth quarter after a surge in confirmed corona virus cases in the US and restrictions in Europe negatively affected clothing sales, Zhitong Finance App learned.

Analyst Adrienne Yih expects sales growth to outpace inventory growth at nearly all companies covered by Barclays in the first quarter of this year, kicking off a four – to six-quarter cycle of merchandise margin expansion.

Yih believes it’s not too late to buy apparel stocks, even with the sector’s recent gains, as expanding commodity margins and sales leverage will boost earnings per share in 2021

Barclays’ bullish stocks include: Capri Holdings (, Canada Goose (, Lululemon (, Tapestry (, pVH (PVH.US), Under Armour (, Ulta Beauty Products (, and