中国服装行业报告（apparelfootwearinitiation）英文.pdfVIP

Despite market angst, were positive on global apparel footwear brands Sector has history of strong stock outperformance, drivers remain supportive On average, the stocks under our coverage have outperformed sector peers industry benchmarks during seven of the past eleven years, kept pace for three, lagged for one. This was driven by superior avg. sales growth (17% y/y), gross margin (51%), EBIT margin (15%), and EPS growth (23% y/y), during that time. Looking ahead, while we respect the risks (continued premium valuation, global growth concerns), we’re comfortable that (1) powerful sector themes (global share gains, margin tailwinds) and co-specific stories outweigh and (2) investor skittishness around market volatility, while a reality, shouldnt dissuade LT interest in the group. Buy NKE, VFC, KORS, RL. Hold UA LULU. Coverage list (now ten names) is diverse, we segment into three sub-sectors (1) Athletic apparel footwear: Driven by global sports participation rates, defining new markets, and continual product (re)introductions, ((2) Apparel brand aggregators: Balance ‘organic’ growth with an expertise in (3) Luxury: Influenced by brand integrity, buying/integrating new brands, ( wealth sustainability, travel trends, Chinese consumerism (home abroad). Sector themes: A broad group on which to focus, but four theses stand out Theme #1: Our brands are share gainers...even given a mixed global macro: A firehose of global data to track, but we focus on employment, disp. inc., and sentiment. Despite slowdown concerns, our brands are gaining share globally. Theme #2: Our brands benefit from controlled sector invty./discounts, despite only ‘decent’ U.S. retailer health: For Brand coverage, it’s critical to understand specialty/dept. stores, which we do based on