The apparel market is booming, driven by strong demand across sectors like sportswear, protective clothing, and more, ensuring steady growth and diversification opportunities. Additionally, brands’ focus on performance, sustainability, and durability aligns with shifting consumer preferences, further fueling market expansion.

In this context, investing in fundamentally strong high-performance apparel stocks like Skechers U.S.A., Inc. (SKX), Columbia Sportswear Company (COLM), and G-III Apparel Group, Ltd. (GIII) could be a winning move in the activewear race.

The high-performance apparel industry is experiencing a strong resurgence. Regional markets showcase strong demand due to growing health awareness and increased outdoor activities. Detailed segmentation by type and application enables businesses to effectively target high-growth niches. By addressing evolving consumer needs, the market is projected to grow at a 10% CAGR, reaching $26.56 billion by 2031.

Furthermore, shifting consumer interest toward eco-friendly and ethical practices presents new opportunities for brands focusing on sustainable apparel. Considering these conducive trends, let’s analyze the fundamental aspects of the three Athletics & Recreation industry picks, beginning with the third choice.

Stock #3: Skechers U.S.A., Inc. (SKX)

SKX designs, develops, markets, and distributes footwear for men, women, and children worldwide. The company operates through two segments; Wholesale and Direct-to-Consumer. It offers products under the Skechers USA, Skechers Sport, Skechers Active, Modern Comfort, etc.

On January 21, 2025, SKX opened its first Skechers Performance store at West Edmonton Mall in Canada, featuring an immersive retail experience with half-courts and a wide range of performance footwear and technologies for basketball, golf, soccer, and more. This 7,500+ square-foot flagship location showcases SKX’s innovative sports products and caters to athletes of all levels.

On December 19, 2024, SKX opened a new flagship concept store on Na Příkopě Street in central Prague, offering an extensive range of footwear, apparel, and accessories. This store enhances SKX’s presence in the Czech Republic, targeting locals and tourists with its signature comfort and performance technologies.

In terms of the trailing-12-month gross profit margin, SKX’s 53.12% is 41.9% higher than the 37.43% industry average. Likewise, its 1.10x trailing-12-month asset turnover ratio is 10.5% higher than the 0.99x industry average. Additionally, the stock’s 9.97% trailing-12-month EBIT margin is 22.9% higher than the 8.11% industry average.

For the third quarter ended September 30, 2024, SKX’s adjusted sales increased 15.9% year-over-year to $2.35 billion. Its adjusted gross profit rose 13.9% from the prior-year quarter to $1.22 billion. Additionally, the company’s adjusted net earnings attributable to SKX were $185 million, or $1.20 per share, up 27.2% and 29% year-over-year, respectively.

Street expects SKX’s EPS for the quarter ended December 31, 2024, to increase 32.3% year-over-year to $0.74. Its revenue for the same quarter is expected to grow 13.1% year-over-year to $2.22 billion. It surpassed the Street EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 26.6% to close the last trading session at $73.46.

SKX’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has a B grade for Growth and Sentiment. It is ranked #5 out of 33 stocks in the Athletics & Recreation industry. To see SKX’s Value, Momentum, Stability, and Quality ratings, click here.

Stock #2: Columbia Sportswear Company (COLM)

COLM and its subsidiaries design, develop, market, and distribute outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment internationally. The company offers apparel, accessories, and equipment for hiking, trail running, snow sports, fishing, hunting, mountaineering, climbing, skiing, snowboarding, and other outdoor activities.

In terms of the trailing-12-month EBITDA margin, COLM’s 11.96% is 3.5% higher than the 11.56% industry average. Likewise, its 15.68% trailing-12-month levered FCF margin is 245.7% higher than the 4.54% industry average. Furthermore, the stock’s 7.54% trailing-12-month Return on Total Capital is 23.2% higher than the 6.12% industry average.

COLM’s net sales for the fiscal third quarter ended September 30, 2024, totaled $931.77 million. Its operating income for the quarter was $112.54 million. Additionally, the company’s net income reached $90.16 million, or $1.56 per share. As of September 30, 2024, its cash and cash equivalents stood at $306.68 million, up 43.8% year-over-year.

For the quarter ended December 31, 2024, COLM’s revenue is expected to increase 1.1% year-over-year to $1.07 billion. Its EPS for fiscal 2025 is expected to rise 10.8% year-over-year to $4.30. COLM surpassed the Street EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has gained 13.7% to close the last trading session at $87.67.

COLM’s POWR Ratings reflect strong prospects. It has an overall rating of B, translating to a Buy in our proprietary system.

It is ranked #2 in the same industry. It has a B grade for Quality. Click here to see COLM’s Growth, Value, Momentum,  Stability, and Sentiment ratings.

Stock #1: G-III Apparel Group, Ltd. (GIII)

GIII designs, sources, and markets women’s and men’s apparel internationally. The company operates through two segments: Wholesale Operations and Retail Operations.

In terms of the trailing-12-month net income margin, GIII’s 5.59% is 25.8% higher than the 4.44% industry average. Likewise, its 8.30% trailing-12-month levered FCF margin is 82.9% higher than the 4.54% industry average. Also, its 6.24% trailing-12-month Return on Total Assets is 58.2% higher than the 3.94% industry average.

For the fiscal third quarter that ended October 31, 2024, GIII’s net sales increased 1.8% year-over-year to $1.09 billion. Its adjusted EBITDA for the period was $174.36 million. Additionally, the company’s non-GAAP net income attributable to GIII and non-GAAP net income per common share were $116.29 million and $2.59, respectively.

Analysts expect GIII’s revenue for the quarter ending January 31, 2025, to increase 5.7% year-over-year to $808.59 million. Its EPS for the same quarter is expected to increase 26.4% year-over-year to $0.96. It surpassed the Street EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 18.6% to close the last trading session at $31.46.

GIII’s POWR Ratings reflect solid prospects. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It has an A grade for Value and a B for Growth. Within the Athletics & Recreation industry, it is ranked first. Click here to see GIII’s ratings for Momentum, Stability, Sentiment, and Quality.

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SKX shares were trading at $75.27 per share on Thursday afternoon, up $1.81 (+2.46%). Year-to-date, SKX has gained 11.94%, versus a 3.69% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More...

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