The outlook for the U.S. apparel retail industry remains promising
Analysts continue to predict that the operating income of the U.S. garment and footwear industry will grow by 6-7% in 2019, and the sales growth rate will be between 4-5%.
Following a very strong business performance in 2018, when earnings grew by more than 9.5% and sales grew by 6.5%, 2016 and 2017 were extremely challenging. In the same year, its earnings fell by -2.5% and -1.0% respectively.
Moody’s Investors Service’s latest “US Retail & Apparel Quarterly Insights Q2” (US Retail & Apparel Quarterly Insights Q2) puts forward this prospect. He also pointed out that the sales growth of American sportswear, track and field sportswear and jeans will continue to lead the global market.
The report says sportswear and athletics ready-to-wear manufacturers are benefiting from increased leisure activities and consumers’ more active lifestyles, while international business will continue to grow in our Sales growth projects play an increasingly important role among rated issuers.
The research focuses on garment companies that sell through third parties, rather than private label garment retailers that sell through their own retail channels.
Analysts also noted that the U.S. retail and apparel industries generally continue to experience a period of prolonged pain after a spike in downgrades and defaults in 2017.
Moody’s Vice President Mickey Chadha said: After 2 years of turbulent events such as bankruptcies and defaults, the U.S. retail industry can finally stop and take a breath, although gains continue to be hard-earned .
Small retailers with high debt ratios will remain vulnerable to the possibility of downgrades in the coming months, while larger and healthier retailers will continue to capture the increasing market share and improve your credit profile.
This will mean more stress spreading throughout the food chain. But even those with the highest ratings are struggling to add dollars, as evidenced by Amazon and Walmart continuing to wage a discount war.
All of this means that any shift in the currently stable U.S. economy, or geopolitical or other unexpected disruptions, could make our U.S. retail industry even more vulnerable challenges to maintain its overall upward momentum.
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