Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Retailers - Apparel & Accessories industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Retailers - Apparel & Accessories Stock News

Before choosing which top Retailers - Apparel & Accessories stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The outlook for the Apparel Retail sub-industry is positive reflecting a positive outlook on the off-price channel, which makes up 77% of the market capitalization in index and our neutral outlook on mall-based apparel brands. In August, The University of Michigan’s Index of Consumer Sentiment dropped to 70.2, the lowest level since the COVID-19 pandemic began. While the pandemic restrictions have slowed significantly, increased shipping and manufacturing costs have become the largest obstacles. These delays are now transferring to the consumer in the form of product shortages and price increases. With the holiday season coming soon, retailers can expect to see normal cyclical boots in revenues. However, e-commerce is rapidly deteriorating the sales recognized at brick-and-mortar stores. Year-to-date through August 16, S&P Composite 1500 Apparel Retail Index rose 18.5%, in line with the S&P 1500 Composite Index gain of 19.0%.

Why Focus on Undervalued Retailers - Apparel & Accessories Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

5 Undervalued Retailers - Apparel & Accessories Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Retailers - Apparel & Accessories industry for Tuesday, December 19, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Retailers - Apparel & Accessories industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Destination XL Group Inc’s Value Grade

Value Grade:

Destination XL Group, Inc. is a specialty retailer of big and tall men's apparel with retail locations throughout the United States. The Company operates through the Retail segment. The Company operates under the trade names of Destination XL, DXL, DXL Men's Apparel, DXL outlets, Casual Male XL and Casual Male XL outlets. Its DXL retail stores, e-commerce site, dxl.com, and mobile application offers its customers merchandise to fit a variety of lifestyles from casual to business, young to mature, in all price ranges and in all large sizes from XL and up. Its Casual Male XL retail stores primarily carry moderate-priced national brands and its own brands of casual sportswear and dresswear. It operates approximately 218 DXL retail stores, 16 DXL outlet stores, 28 Casual Male XL retail stores, 19 Casual Male XL outlet stores, and a digital business, including an e-commerce site at www.dxl.com, a mobile site, m.destinationXL.com and mobile application.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Destination XL Group Inc has a Value Score of 90, which is considered to be undervalued.

When you look at Destination XL Group Inc’s price-to-sales ratio at 0.51 compared to the industry median at 0.43, this company has a higher price relative to revenue compared to its peers. This could make Destination XL Group Inc’s stock less attractive for value investors.

Destination XL Group Inc’s price-earnings ratio is 9.45 compared to the industry median at 12.03. This means it has a lower share price relative to earnings compared to its peers. This could make Destination XL Group Inc more attractive for value investors.

Now, let’s assess Destination XL Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.1, when compared to the industry median of 5.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Destination XL Group Inc’s shareholder yield is higher than its industry median ratio of 1.67%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Destination XL Group Inc’s price-to-book ratio is lower than its industry median ratio of 2.14. This could make Destination XL Group Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Destination XL Group Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Destination XL Group Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 14.52. This could make Destination XL Group Inc more attractive because the lower P/FCF ratio indicates that Destination XL Group Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Genesco Inc’s Value Grade

Value Grade:

Genesco Inc. is a retailer and wholesaler of branded footwear, apparel and accessories. The Company operates through four segments. Journeys Group segment is comprised of the Journeys, Journeys Kidz and Little Burgundy retail footwear chains and e-commerce operations. Schuh Group segment comprises the Schuh retail footwear chain and e-commerce operations. Johnston & Murphy Group segment comprises Johnston & Murphy retail operations, e-commerce operations and wholesale distribution of products under the Johnston & Murphy brand. Genesco Brands Group segment comprises the licensed Dockers, Levi's, and G.H. Bass brands, as well as other brands it licenses for footwear. It also sources, designs, markets and distributes footwear under its Johnston & Murphy brand and the licensed Levi's, Dockers and G.H. Bass brands, as well as other brands that it licenses for footwear to over 1,000 retail accounts in the United States, including various department, discount and specialty stores.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Genesco Inc has a Value Score of 98, which is considered to be undervalued.

Genesco Inc’s price-to-book ratio is higher than its peers. This could make Genesco Inc less attractive for value investors when compared to the industry median at 2.14.

You can read more about Genesco Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Children's Place Inc’s Value Grade

Value Grade:

The Children's Place, Inc. is a children?s specialty apparel retailer in North America. It provides apparel, footwear, accessories, and other items for children and tweens. It designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell merchandise under The Children?s Place, Place, Baby Place, Gymboree, Sugar & Jade, and PJ Place brand names. Its segments include The Children?s Place U.S. and The Children?s Place International. The Children?s Place U.S. segment includes the United States and Puerto Rico-based stores. The Children?s Place International segment includes Canadian based wholesale business, as well as international franchisees. It serves the wardrobe needs of girls and boys (sizes 4-18), toddler girls and boys (sizes 6 months-5T), and baby (sizes 0-24 months). It operates over 613 stores throughout North America. Its merchandise is available online at www.childrensplace.com, www.gymboree.com, www.sugarandjade.com and https://www.pjplace.com.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Children's Place Inc has a Value Score of 82, which is considered to be undervalued.

Children's Place Inc’s price-to-book ratio is lower than its peers. This could make Children's Place Inc more attractive for value investors when compared to the industry median at 2.14.

You can read more about Children's Place Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Tillys Inc’s Value Grade

Value Grade:

Tilly's, Inc. is a specialty retailer of casual apparel, footwear and accessories for young men, young women, boys and girls. The Company?s stores are located in a variety of retail centers, including malls, lifestyle centers, power centers, community centers, outlet centers, and street-front locations. The Company also offers online shopping, where it offers the same products as it offers in stores, supplemented by additional online-only styles. The Company operates approximately 249 stores in 33 states. The Company's third-party brands include Adidas, BDG, Billabong, Birkenstock, Brixton, Champion, Converse, Diamond Supply, Dickies, Dr. Martens, Ethika, Free People, G-Shock, Herschel Supply Co., HUF, Hydro Flask, Jansport, Levi's, New Balance Nike, SB, O'Neill, Stance and others. It supplement its third-party merchandise assortment with its own brands across many of its product categories. It sells merchandise over the Internet through its e-commerce Website, www.tillys.com.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Tillys Inc has a Value Score of 79, which is considered to be undervalued.

Tillys Inc’s price-to-book ratio is higher than its peers. This could make Tillys Inc less attractive for value investors when compared to the industry median at 2.14.

You can read more about Tillys Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Tapestry Inc’s Value Grade

Value Grade:

Tapestry, Inc. is a global house of luxury accessories and lifestyle brands. The Company's brands include Coach, Kate spade New York, and Stuart Weitzman. The Company operates through three segments: Coach, Kate Spade and Stuart Weitzman. The Coach segment includes global sales of Coach products to customers through Coach operated stores, including e-commerce sites and concession shop-in-shops, and sales to wholesale customers and through independent third-party distributors. The Kate Spade segment includes global sales primarily of kate spade new york brand products to customers through Kate Spade operated stores, including e-commerce sites and concession shop-in-shops, sales to wholesale customers, and through independent third-party distributors. The Stuart Weitzman segment includes global sales of Stuart Weitzman brand products primarily through Stuart Weitzman operated stores, sales to wholesale customers, through e-commerce sites, and through independent third-party distributors.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Tapestry Inc has a Value Score of 76, which is considered to be undervalued.

Tapestry Inc’s price-earnings ratio is 9.1 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Tapestry Inc more attractive for value investors.

Tapestry Inc’s price-to-book ratio is lower than its peers. This could make Tapestry Inc more attractive for value investors when compared to the industry median at 2.14.

You can read more about Tapestry Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Retailers - Apparel & Accessories Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Retailers - Apparel & Accessories stocks as well as other industrys.

Choosing Which of the 5 Best Retailers - Apparel & Accessories Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Destination XL Group Inc stock has a Value Grade of A.
• Genesco Inc stock has a Value Grade of A.
• Children's Place Inc stock has a Value Grade of A.
• Tillys Inc stock has a Value Grade of B.
• Tapestry Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 5 undervalued stocks in the Retailers - Apparel & Accessories industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Retailers - Apparel & Accessories Stocks

Want to learn more about Retailers - Apparel & Accessories stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 5 Undervalued Retailers - Apparel & Accessories Stocks for Tuesday, December 19
• What You Need to Know About Abercrombie & Fitch Co's Q3 Earnings
• What You Need to Know About Academy Sports and Outdoors Inc's Q3 Earnings
• What You Need to Know About American Eagle Outfitters Inc's Q3 Earnings

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.