Consumer apparel stocks draw interest as tech trade weakens

Traders Union
All News
Stocks
Consumer apparel stocks gain

Highlights

SPDR S&P Retail ETF (XRT) is up 10% this quarter while Technology Select Sector SPDR Fund (XLK) is down 11%, prompting a rotation into apparel stocks.
Ralph Lauren is favored for its momentum and international growth ahead of Thursday's earnings, with Tapestry and Coach also reporting despite Tapestry shares dropping 20% since August.
Levi Strauss shares have rebounded over 20% from post-earnings lows and Kontoor Brands plans to sell Lee brand for up to $1 billion to facilitate buybacks.

Retail rotation and earnings catalysts

As reported by CNBC, Cramer on Monday pointed investors toward six fashion and apparel stocks as alternatives to the struggling AI trade, citing relative strength in consumer names. The SPDR S&P Retail ETF, XRT, is up 10% this quarter, while the Technology Select Sector SPDR Fund, XLK, is down 11%.

Cramer says Ralph Lauren remains his preferred apparel name because of steady growth under CEO Patrice Louvet and momentum in women's apparel, accessories and outerwear. He also points to the group's expanding international presence, especially in Asia, and says he is optimistic ahead of Thursday morning's earnings report.

Tapestry, parent of Coach and Kate Spade, also reports Thursday. Cramer says Coach is well positioned in accessible luxury, particularly with younger female shoppers, even though Tapestry shares have fallen 20% since the company's August earnings report after guidance failed to impress investors.

Turnaround themes in denim and brand portfolios

Levi Strauss is another name Cramer frames as a turnaround play after the stock dropped below $20 following disappointing earnings a few weeks ago. He says the shares have since rebounded more than 20% from their post-earnings low, while the company has moved quickly to address inventory shortages in popular styles, according to comments from CEO Michelle Gass.

VF Corp is also showing signs of improvement after a prolonged difficult period, particularly at Vans. Cramer cites favorable findings from a recent Piper Sandler teen survey and a strong quarterly report as evidence that the sneaker brand's turnaround is gaining traction, with the stock up roughly 14% since he recommended it about two weeks ago.

Kontoor Brands is tied to both denim demand and portfolio restructuring, with plans to sell its Lee brand for up to $1 billion so it can focus on Wrangler and Helly Hansen. Cramer says that move could pave the way for sizable share repurchases, while his most speculative pick, Reformation, stands out for growth, profitability and what he describes as a differentiated shopping experience enhanced by technology.

In our earlier article on Ralph Lauren tying executive payouts to AI metrics, we explained how the company added AI literacy and enablement goals to its FY2026 incentive plan while removing prior sustainability targets. We also noted this as part of a broader retail trend where brands are increasingly using AI across pricing, inventory, and customer tools—and beginning to hold senior leadership accountable for AI adoption.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.