12 Best Clothing Stocks To Buy Now

Published November 23, 2022 at 2:20 pm EST Updated August 31, 2026 at 8:41 pm EDT

In this article, we discuss 12 best clothing stocks to buy now.

According to The Business Research Company, the global apparel market climbed from $551.36 billion in 2021 to $606.19 billion in 2022 at a compound annual growth rate (CAGR) of 9.9%. In the near-term, the Russia-Ukraine war hindered the chances of global economic recovery from the COVID-19 pandemic. The apparel market is now forecasted to grow to $768.26 billion in 2026 at a CAGR of 6.1%.

Despite widespread labor tightness and supply chain constraints, the fashion and apparel industry recorded $180.5 billion in ecommerce revenue in 2021, up from $145 billion in 2020. Growth estimates for fashion e-commerce revenue in 2022 came in at $205 billion. Some of the biggest clothing companies like Gucci, Chanel, and Louis Vuitton have brand values worth billions of dollars, and loyal customers around the world. Western Europe was the largest region in the apparel market in 2021, with Asia Pacific being the second largest.

Some of the best clothing stocks that investors can monitor include The TJX Companies, Inc. (NYSE:TJX), Lululemon Athletica Inc. (NASDAQ:LULU), and NIKE, Inc. (NYSE:NKE).

Our Methodology

We selected the following clothing stocks based on positive analyst coverage, strong business fundamentals, and future growth prospects. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022.

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Best Clothing Stocks To Buy Now

12. Urban Outfitters, Inc. (NASDAQ:URBN)

Number of Hedge Fund Holders: 21

Urban Outfitters, Inc. (NASDAQ:URBN) is a Pennsylvania-based company that operates Urban Outfitters stores, which offer women’s and men’s fashion apparel, activewear, footwear, accessories, home goods, electronics, and beauty products. On November 21, Urban Outfitters, Inc.’s net sales for the third quarter rose 3.9% compared to the prior-year quarter to $1.18 billion. Meanwhile, the Q3 EPS of $0.40 fell short of analysts’ estimates by $0.02.

On November 21, BofA analyst Lorraine Hutchinson raised the price target on Urban Outfitters, Inc. to $30 from $25 and maintained a Buy rating on the shares after the company’s Q3 EPS exceeded her estimate and management guided to low-single digit percentage Q4 sales growth. Two of Urban Outfitters, Inc.’s three brands are “holding up very well in a tough environment” and she forecasts the company’s supply chain to allow for a quicker return to aligned inventory, giving her more confidence in her FY24 estimates, the analyst told investors.

According to Insider Monkey’s data, 21 hedge funds were bullish on Urban Outfitters, Inc. at the end of Q3 2022, with collective stakes worth $64.5 million, compared to 21 funds in the prior quarter worth $70 million. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 1.07 million shares worth $21.12 million.

Like The TJX Companies, Inc., Lululemon Athletica Inc., and NIKE, Inc., Urban Outfitters, Inc. is one of the premier clothing stocks to consider.

11. Victoria’s Secret & Co. (NYSE:VSCO)

Number of Hedge Fund Holders: 24

Victoria’s Secret & Co. is an American specialty retailer of women’s intimate, personal care, and beauty products worldwide. The company offers sleepwear, loungewear, athletic attire, and swimwear. On October 12, Victoria’s Secret & Co. said it estimates Q3 operating income to be towards the high end of its prior guidance range of $10 million to $40 million and the EPS is estimated to be towards the high end of the prior guidance range of $0.00 to $0.25, which means it will potentially outperform the consensus of $0.14. The management said it is positioned to deliver sustainable long-term sales growth, significant free cash flow, and mid-teens operating margin rates over time. Victoria’s Secret & Co. is one of the best clothing stocks to invest in.

On November 1, Victoria’s Secret & Co. announced that it has signed a definitive agreement to acquire Adore Me, a digitally-native intimates brand, in a deal worth $400 million. This acquisition will be a meaningful accelerant as Victoria’s Secret & Co. moves towards growth and modernizes its business model, putting technology at the forefront of operations.

According to the third quarter database of Insider Monkey, 24 hedge funds held stakes worth $430.8 million in Victoria’s Secret & Co., compared to 24 funds in the prior quarter worth $438.3 million. Snehal Amin’s Windacre Partnership is the biggest position holder in the company, with 7.5 million shares worth about $220 million.

10. The Gap, Inc. (NYSE:GPS)

Number of Hedge Fund Holders: 25

The Gap, Inc. (NYSE:GPS) is a California-based apparel retail company that provides clothes, accessories, and personal care products for men, women, and children under the Old Navy, Gap, Banana Republic, and Athleta brands. On November 17, The Gap, Inc. reported a Q3 non-GAAP EPS of $0.71 and a revenue of $4.04 billion, topping Wall Street estimates by $210 million. Online sales increased 5% compared to last year and represented 39% of total net sales.

On November 21, Deutsche Bank analyst Gabriella Carbone raised the price target on The Gap, Inc. to $11 from $8 and reiterated a Hold rating on the shares. The Gap, Inc. reported Q3 results that exceeded Street estimates with a better than anticipated top and bottom-line performance, the analyst wrote in a research note.

According to Insider Monkey’s data, 25 hedge funds were bullish on The Gap, Inc. at the end of the third quarter of 2022, compared to 27 funds in the prior quarter. The collective stakes held by elite hedge funds in Q3 amounted to $255.4 million, up from $234.3 million in Q2 2022. Richard S. Pzena’s Pzena Investment Management is the largest position holder in the company, with 11.7 million shares worth $96.3 million.

9. Abercrombie & Fitch Co. (NYSE:ANF)

Number of Hedge Fund Holders: 26

Abercrombie & Fitch Co. is an American specialty retailer offering apparel, personal care products, and accessories for men, women, and children under the Hollister, Abercrombie & Fitch, Abercrombie Kids, Moose, Seagull, Gilly Hicks, and Social Tourist brands. On November 22, Abercrombie & Fitch Co. posted a Q3 non-GAAP EPS of $0.01 and a revenue of $880.08 million, outperforming Wall Street consensus by $0.13 and $48.91 million, respectively. The company’s double-digit sales growth at the core Abercrombie & Fitch brand offset slowing sales trends at the Hollister brand.

JPMorgan analyst Matthew Boss on October 31 maintained a Neutral rating on Abercrombie & Fitch Co. but trimmed the price target on the shares to $17 from $20 ahead of the Q3 results.

According to Insider Monkey’s Q3 data, 26 hedge funds were bullish on Abercrombie & Fitch Co., compared to 22 funds in the earlier quarter. Dmitry Balyasny’s Balyasny Asset Management is the biggest stakeholder of the company, with 1.8 million shares worth $28 million.

8. American Eagle Outfitters, Inc. (NYSE:AEO)

Number of Hedge Fund Holders: 27

American Eagle Outfitters, Inc. (NYSE:AEO) is a specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands. On November 22, American Eagle Outfitters, Inc. reported Q3 GAAP earnings per share of $0.42 and a revenue of $1.24 billion, exceeding Wall Street estimates by $0.21 and $30 million, respectively. The stock rose over 14% after posting stronger than expected profits and lower inventory overhang.

On September 16, JPMorgan analyst Matthew Boss raised the price target on American Eagle Outfitters, Inc. to $13 from $12 and maintained a Neutral rating on the shares. The analyst established December 2023 price targets across his coverage. Consumer and retail CEOs remain “tempered” on second half of 2022 expectations due to the tough macroeconomic environment, but nearly every company demonstrated signs of “improvement” in August relative to the June trough, the analyst told investors in a research note.

According to Insider Monkey’s data, 27 hedge funds were long American Eagle Outfitters, Inc. at the end of Q3 2022, compared to 29 funds in the prior quarter. Gavin Baker’s Atreides Management is the largest stakeholder of the company, with 3.7 million shares worth $36.7 million.

7. Boot Barn Holdings, Inc. (NYSE:BOOT)

Number of Hedge Fund Holders: 31

Boot Barn Holdings, Inc. (NYSE:BOOT) is a California-based lifestyle retail chain that operates specialty retail stores in the United States. The company’s specialty retail stores offer western and work-related footwear, apparel, and accessories for men, women, and kids. It is one of the best clothing stocks to invest in.

On October 27, Baird analyst Jonathan Komp reaffirmed an Outperform rating on Boot Barn Holdings, Inc. but trimmed the price target on the shares to $75 from $80. The analyst said management conveyed a confident outlook driven by ongoing robust execution, though with October-to-date comps decelerated to -1.3%, which meaningfully reflect a drop in lower-margin online sales, they lowered FY2023 EPS guidance.

According to Insider Monkey’s data, 31 hedge funds were bullish on Boot Barn Holdings, Inc. at the end of September 2022, compared to 34 funds in the preceding quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP held the biggest position in the company, comprising 878,872 shares worth $51.3 million.

Here is what Wasatch Small Cap Growth Fund has to say about Boot Barn Holdings, Inc. in its Q4 2021 investor letter:

“The top contributor to Fund performance for the fourth quarter was Boot Barn Holdings, Inc. (BOOT)—a specialty retailer offering increasingly popular Western and work-related apparel, footwear and accessories. Boots are somewhat resistant to online competition because they often require specialized fitting. The company has benefited from its economies of scale and multi-channel business model, which have kept revenues flowing during virus-related shutdowns. Stimulus payments by the federal government to consumers have helped as well. Boot Barn’s private-label brands, built around well-known personalities in the music business, have enabled the company to convert higher portions of its revenues into bottom-line profits. For most of the period since March 2020, Boot Barn’s stock rallied on these positive conditions—and this rally continued in the fourth quarter. We consider Boot Barn’s management to be excellent, and we’ve continually added to our position on periodic price weakness within the context of an overall upward trajectory in the stock.”

6. Tapestry, Inc. (NYSE:TPR)

Number of Hedge Fund Holders: 40

Tapestry, Inc. (NYSE:TPR) is a New York-based company that provides luxury accessories and branded lifestyle products in the United States, Japan, Greater China, and internationally. The company operates through three segments – Coach, Kate Spade, and Stuart Weitzman. It is one of the premier clothing stocks to monitor. Tapestry, Inc. reported market-beating Q3 results.

On November 17, Tapestry declared a quarterly dividend of $0.30 per share, in line with previous. The dividend is payable on December 27, to shareholders of record on December 9. The dividend yield on November 23 came in at 3.31%.

Citi analyst Paul Lejuez on November 14 maintained a Buy rating on Tapestry but lowered the firm’s price target on the shares to $40 from $42. The company’s Q1 results were about in line with expectations, though revenues in North America were light, the analyst told investors in a research note.

Among the hedge funds tracked by Insider Monkey, 40 funds reported owning stakes worth $637.3 million in Tapestry at the end of Q3 2022, compared to 36 funds in the prior quarter worth $535.2 million. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital held the largest stake in the company, with 3.6 million shares valued at $104.35 million.

Like The TJX Companies, Inc., Lululemon Athletica Inc., and NIKE, Inc., Tapestry is one of the clothing stocks backed by elite hedge funds.

Here is what Ariel International & Ariel Global Fund has to say about Tapestry, Inc. in its Q3 2021 investor letter:

“Luxury accessory and lifestyle brand, Tapestry, Inc. was the top contributor to performance over the trailing one-year period. Revenue improvement across all three brands with a notable increase in consumer demand, particularly for the Coach business, triple-digit growth in e-commerce, and better than expected pricing, drove margins higher. Looking ahead, we expect Tapestry’s supply chain and SKU rationalization initiatives to continue to deliver margin expansion. Together, with early signs of improved receptivity for the Kate Spade brand, we believe a significant value creation opportunity lies ahead.”

5. Ross Stores, Inc. (NASDAQ:ROST)

Number of Hedge Fund Holders: 43

Ross Stores, Inc. (NASDAQ:ROST) is a California-based company that operates off-price retail apparel and home fashion stores. The stores primarily offer apparel, accessories, footwear, and home fashions. In addition to posting market-beating Q3 2022 results, Ross Stores, Inc. declared on November 17 a $0.31 per share quarterly dividend, in line with previous. The dividend is payable on December 30, to shareholders of the company as of December 6.

On November 21, Barclays analyst Adrienne Yih raised the price target on Ross Stores, Inc. to $127 from $98 and reiterated an Overweight rating on the shares. The company’s Q3 earnings report “was the second proof point that the balance of power has shifted in Off-Price’s favor,” the analyst wrote in a research note.

According to Insider Monkey’s third quarter database, 43 hedge funds held stakes in Ross Stores, Inc., and Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of the company.

Here is what Madison Mid Cap Fund has to say about Ross Stores, Inc. in its Q3 2022 investor letter:

“Ross Stores is one of our longest-tenured holdings. Its profits have gyrated wildly since the beginning of the pandemic, first from store closures and shutdowns, then from the pent-up demand for apparel, and more recently, from the economic uncertainty. Adding to that, Ross is finding that consumers’ spending trends in terms of mix and categories have been more difficult to predict than usual, resulting in some mismatches between its merchandise assortment and what shoppers want. This doesn’t appear to be a Ross-specific issue, as other apparel retailers have reported similar problems. We attribute this to the unusual post-pandemic environment, and while we don’t have a crystal ball as to when this will normalize, we believe it will.”

4. Farfetch Limited (NYSE:FTCH)

Number of Hedge Fund Holders: 50

Farfetch Limited (NYSE:FTCH) is a London-based provider of an online marketplace for luxury fashion goods in the United States, the United Kingdom, and internationally. It operates through three segments – Digital Platform, Brand Platform, and In-Store. Farfetch Limited is one of the premier clothing stocks to monitor.

On November 21, investment advisory Societe Generale maintained a Buy recommendation on Farfetch Limited but lowered the firm’s price target on the shares to $11 from $12. Analyst Abhinav Sinha issued the ratings update.

According to the third quarter database of Insider Monkey, Gavin Baker’s Atreides Management is a prominent position holder in the company, with approximately 11 million shares worth $81.30 million. Overall, 50 hedge funds were long Farfetch Limited at the end of Q3 2022, up from 39 funds in the earlier quarter.

Here is what Polen U.S. Small Company Growth Fund has to say about Farfetch Limited in its Q1 2022 investor letter:

“We also initiated a position in global luxury fashion e-commerce marketplace Farfetch in the first quarter and took advantage of meaningful weakness in the company’s share price during the period. Farfetch previously had too large a market cap for the Portfolio, but it has since moved to a level where it’s appropriate to own it – both in this Portfolio and in our smid-cap strategy. The company’s fundamentals remain attractive as indicated by the compelling results Farfetch reported in February.

The company remains an early mover with “the world’s only truly global marketplace for luxury at scale”. Farfetch has a broader reach around the world with a diversity of brands that is much larger than its competitors. Many of the items it sells are exclusive. Our research shows that its brand assortment, brand image, geographic breadth, an inventory-light business model, a more compelling offering for luxury partners, and artificial intelligence are all competitive edges for the company. We believe Farfetch is well-positioned for the continued market share shift from offline to online in this category. The personal luxury goods market has trailed other categories in online penetration, but consumer behaviors and preferences shifted as a result of the pandemic creating more comfort with purchasing goods like this online. Changed behavior and the general shift to a higher portion of Millennial and Gen Z luxury shoppers supports this continued shift as does the growth in emerging market demand.”

3. The TJX Companies, Inc. (NYSE:TJX)

Number of Hedge Fund Holders: 55

The TJX Companies, Inc. is a Massachusetts-based retailer of off-price apparel and home fashions. The company sells family apparel, furniture, rugs, lighting products, giftware, soft home products, cookware, and other merchandise. On September 19, The TJX Companies, Inc. declared a $0.295 per share quarterly dividend, in line with previous. The dividend is payable on December 1, to shareholders of record on November 10. It is one of the best clothing stocks to buy now.

On November 18, Barclays analyst Adrienne Yih raised the price target on The TJX Companies, Inc. to $94 from $76 and reiterated an Overweight rating on the shares following the Q3 results.

Among the hedge funds tracked by Insider Monkey, 55 funds were bullish on The TJX Companies, Inc. at the end of September 2022, compared to 49 funds in the prior quarter. Tim Hurd and Ed Magnus’ BlueSpruce Investments held the largest stake in the company, comprising 5.35 million shares worth $332.3 million.

Here is what ClearBridge Investments Large Cap Value Strategy has to say about The TJX Companies, Inc. in its Q4 2021 investor letter:

“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included TJX, an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”

2. Lululemon Athletica Inc. (NASDAQ:LULU)

Number of Hedge Fund Holders: 57

Lululemon Athletica Inc. is a Canadian retailer of athletic apparel and accessories for women and men. It operates in two segments – Company-Operated Stores and Direct to Consumer. Lululemon Athletica Inc. is one of the top clothing stocks to invest in.

On October 25, JPMorgan analyst Matthew Boss maintained an Overweight rating on Lululemon Athletica Inc. but lowered the price target on the shares to $413 from $464. The analyst raised his Q3 revenue estimate to up 29.6% year-over-year, above consensus at up 24.8%. He believes newness and innovation are driving “model momentum” at Lululemon Athletica Inc..

According to Insider Monkey’s data, 57 hedge funds were long Lululemon Athletica Inc. at the end of September 2022, compared to 50 funds in the preceding quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the biggest stakeholder of the company, with 1.06 million shares worth $296.6 million.

1. NIKE, Inc. (NYSE:NKE)

Number of Hedge Fund Holders: 70

NIKE, Inc., the American retailer of athletic footwear, apparel, sports equipment, and accessories, is one of the best clothing stocks to monitor. On November 15, NIKE, Inc. declared a $0.340 per share quarterly dividend, an 11.5% increase from its prior dividend of $0.305. The dividend is payable on December 28, to shareholders of record on December 5.

On November 22, Cowen analyst John Kernan raised the price target on NIKE, Inc. to $118 from $114 and kept an Outperform rating on the shares. The analyst said momentum in pricing outside of apparel remains clear, with new innovation set for Spring/Summer 2023 and its ability to flow goods at a much improved rate into both DTC and wholesale for Nike and Jordan Brand.

According to Insider Monkey’s Q3 data, NIKE, Inc. was part of 70 hedge fund portfolios, compared to 72 in the prior quarter. Ken Fisher’s Fisher Asset Management featured as the largest stakeholder of the company, with 8.7 million shares worth $728.8 million.

Here is what Leaven Partners has to say about NIKE, Inc. in its Q3 2022 investor letter:

“Nike: NKE shares were a top detractor this quarter on higher inventory balances leading to lower-than-expected gross margins for the next couple of quarters. The company reported 1Q23 sales and EPS beats, but freight costs, markdowns, and the strong dollar weighed on gross margins. Nike continues to expect low double-digit currency-neutral sales growth, but the strong dollar will reduce overall sales growth and discounted inventory will further reduce gross margins for the year.

Nike is, by far, the leading athletic footwear, apparel, and equipment company in the world with over $46 billion in revenue, $6 billion in 2021 annual free cash flow, and over $4 billion of excess cash. After working through its near-term currency and gross margin issues, we expect the company to return towards management’s guidance of at least 10% annual revenue growth, and return to its accelerating profit growth, as longer-term we expect margins to be materially aided by rising average sales prices (from both increased pricing and a mix shift to more premium products), the company’s deep innovation pipeline, a secular shift from the company’s traditional wholesale channels to a more direct-to-consumer approach (now 35% of revenues up from 16% ten years ago), and a more streamlined supply chain. We believe that the continued global secular growth trend towards active wear will continue to aid Nike’s top-line growth, while we expect the combined gross and operating margin improvements from its initiatives will drive long-term mid-teens or higher annual EPS growth for the foreseeable future.”

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