Jim Cramer identified six fashion and apparel stocks as buys on Monday, citing resilience in consumer stocks as an alternative to the struggling technology sector. The SPDR S&P Retail ETF (XRT) gained 10% this quarter while the Technology Select Sector SPDR Fund (XLK) fell 11%. Cramer noted that falling interest rates could provide additional support to apparel companies ahead of the holiday season.
Cramer's six picks are Ralph Lauren, Tapestry, Levi Strauss, VF Corp, Kontoor Brands, and Reformation.
Ralph Lauren remains Cramer's favorite apparel stock, driven by consistent growth under CEO Patrice Louvet across women's apparel, accessories, and outerwear, plus strengthening international presence in Asia. The stock recovered after pullbacks in August and September. Ralph Lauren reports earnings Thursday.
Tapestry, parent of Coach and Kate Spade, also reports Thursday. Cramer likes Coach's position in accessible luxury, especially with younger female consumers, but shares fell 20% following August earnings when guidance disappointed investors after a multiyear rally.
Levi Strauss shares fell below $20 after disappointing earnings but rebounded more than 20% from that low. CEO Michelle Gass told Cramer the company quickly addressed inventory shortages in popular styles. Cramer called the stock inexpensive at roughly 14 times earnings with a 2.8% dividend yield.
VF Corp, which owns The North Face, Vans, and Timberland, showed improvement signs after years of struggles, particularly at Vans. Piper Sandler teen survey results and a strong quarterly report suggest the sneaker brand's turnaround may be gaining traction. Shares rose roughly 14% since Cramer recommended the stock two weeks ago.
Kontoor Brands plans to sell its Lee brand for up to $1 billion to focus on Wrangler and Helly Hansen. Cramer expects the sale to trigger substantial share repurchases. Shares trade at roughly 14 times earnings with a dividend yield near 3%.
Reformation, a women's fashion brand, initially struggled after its late July IPO. Cramer called it profitable with great growth and a differentiated shopping experience. He highlighted the stock in late September; shares surged more than 31% in October.