May 28 Reuters Results from U.S. mallbased apparel chains this week will give a clearer picture of whether Americans are splurging on clothes and accessories heading into summer following mixed results from big retailers Walmart and Target.
Abercrombie and American Eagle are set to see revenue rise for at least their fifth straight quarter, while Gap is expected to post a marginal growth in comparable sales after five quarters of declines, betting on inseason merchandise to drive demand at full price.
We are seeing green shoots in traditional apparel driven by fashion newness, like wideleg bottoms. While category growth remains tepid, we are seeing a wider gap between share gainers and losers, said Mari Shor, a senior equity analyst at Columbia Threadneedle Investments.
While a focus on fresh styles is expected to pull customers to these brands this summer, cleaner inventories have also helped companies offer fewer goods at discounts, boosting margins.
The expectation of strong demand for apparel companies comes as shoppers hesitate to splurge on bigticket discretionary items like electronics and home furnishing.
Earlier in the month, Walmart reported a blowout quarter and raised its annual forecast on the back of demand for groceries as well as nonessential goods.
Walmart leads the total apparel retail market in the U.S. in terms of market share, according to data from research firm GlobalData, followed closely by Target.
Offprice retailers including TJX Cos and…