Wedding-related businesses have suffered over the past year because countless couples were forced to delay their wedding plans due to pandemic-related restrictions. In addition, the resurgence of COVID-19 cases due to the rapid spread of the Delta variant is now a new cause of worry for some.
However, increasing vaccinations and the reopening of several venues are expected to boost weddings in the coming months. According to the Wedding Report, 1.9 million weddings are expected to occur this year, and there could be 2.5 million weddings next year. This surge is expected to benefit businesses offering wedding dresses, jewelry, etc.
Macy’s, Inc. (M), Signet Jewelers Limited (SIG), and Urban Outfitters, Inc. (URBN) are well-positioned to benefit from the increasing demand for wedding-related products as the number of weddings increases. So, it could be wise to bet on them now.
Macy’s, Inc. (M)
One of the nation’s premier omnichannel fashion retailers, M’s portfolio of brands includes Macy’s, Bloomingdale’s, and Bluemercury. The Cincinnati, Ohio company has roughly 726 retail stores and also operates through its websites and mobile applications. In addition, it offers wedding registry services.
On August 26, 2021, Bloomingdale’s launched its first “Bloomie’s” store in Fairfax, Virginia. Also, on August 19, 2021, M announced a partnership with WHP Global to bring together Macy’s and Toys”R”Us. These strategic moves are expected to help M expand in the retail space.
For its fiscal second quarter, ended July 31, 2021, M’s net revenue increased 58.7% year-over-year to $5.65 billion, with comparable sales up 61.2% year-over-year. The company’s operating income came in at $597 million, versus a $631 million loss in the prior year. Its net income was $345 million compared to a loss of $431 million in the year-ago period. Also, its EPS came in at $1.08, versus a $1.39 loss per share in the prior year’s quarter.
M’s revenue is expected to come in at $23.63 billion in its fiscal year 2022, representing a 36.2% year-over-year rise. The company’s EPS is expected to increase 272.4% year-over-year to $3.81 in the current year. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 116.7% in price to close yesterday’s trading session at $22.54.
It’s no surprise that M has an overall B rating in the POWR Ratings, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
In addition, it has an A grade for Growth and Value, and a B grade for Quality. As a result, M is ranked #20 of 64 stocks in the A-rated Fashion & Luxury industry. Click here to see the additional POWR Ratings for M (Momentum, Stability, and Sentiment).
Signet Jewelers Limited (SIG)
The world’s largest retailer of diamond jewelry and the largest specialty jewelry retailer in the U.S., U.K., and Canada, SIG’s offerings include engagement rings. The Hamilton, Bermuda company operates roughly 2,800 stores under various brand names, including Kay Jewelers, Zales, Jared, H.Samuel, Ernest Jones, and Peoples Jewellers.
Alliance Data Systems Corporation (ADS) announced in May 2021 that its Card Services business had signed a multi-year renewal agreement with SIG to continue providing private label credit card services. The company’s CEO, Virginia C. Drosos, said, “Our partnership with Alliance Data has been instrumental in providing data and insights that enable Signet to reach customers with the right offer at just the right time.”
For its fiscal second quarter, ended July 31, 2021, SIG’s net revenue increased 101.4% year-over-year to $1.79 billion. The company’s operating income came in at $225.40 million compared to an $89.70 million loss in the previous year. Its net income was $216 million compared to a $90 million loss in the year-ago period. Also, its EPS was $3.60 compared to a loss per share of $1.73 in the prior year’s quarter.
For its fiscal year 2022, SIG’s revenue and EPS are expected to grow 28.5% and 242.7%, respectively, year-over-year to $6.71 billion and $7.23. In addition, it surpassed consensus EPS estimates in each of the trailing four quarters. Over the past month, the stock has gained 25.4% in price to close yesterday’s trading at $80.66.
SIG’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system. In addition, it has an A grade for Growth and Momentum, and a B grade for Value and Quality.
Urban Outfitters, Inc. (URBN)
Lifestyle specialty retail company URBN operates through two segments: Retail and Wholesale. The company’s portfolio of global consumer brands includes Anthropologie, Free People, and Nuuly. Also, it sells wedding dresses and offers wedding registry services through Anthropologie. URBN is headquartered in Philadelphia, Pa.
On August 24, 2021, URBN announced the launch of Nuuly Thrift, a resale marketplace that will open in the fall this year. This is expected to help the company capitalize on shifting customer behavior and gain market share in the rapidly expanding online resale market.
URBN’s total revenue increased 44.1% year-over-year to $1.16 billion for its fiscal second quarter, ended July 31, 2021. The company’s income from operations came in at $165.85 million, up 138.9% year-over-year. Its net income in the quarter was $127.26 million, representing a 269.9% year-over-year rise. Also, its EPS came in at $1.28, up 265.7% year-over-year.
For its fiscal year 2022, analysts expect URBN’s revenue to be $4.49 billion, representing a 30.1% year-over-year rise. The company’s EPS is expected to increase 31,900.0% year-over-year to $3.20 in fiscal 2022. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 23.6% to close yesterday’s trading session at $33.82.
URBN’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Rating system. Also, the stock has an A grade for Momentum, and a B grade for Value and Quality.
Click here to see URBN’s ratings for Growth, Stability, and Sentiment as well. Again, URBN is ranked #26 in the Fashion & Luxury industry.
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M shares were trading at $22.93 per share on Thursday morning, up $0.39 (+1.73%). Year-to-date, M has gained 103.82%, versus a 22.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Manisha Chatterjee
Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...
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