Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Demand for Winter Clothes Is Heating Up as the Temperatures Drop

If you put up with chilly weather during the Black Friday shopping extravaganza, chances are that you may have invested some of your spending cash on winter wear. As folks at the Weather Channel will confirm, it's no secret that current weather conditions have an impact on consumer purchasing decisions. Planalytics, a research firm that provides insight on how weather patterns affect consumer demand, expects that the colder weather will impact sales of knitwear, winter boots, and coats. In fact, the firm predicts that knitwear sales should rise about 30% over the 2012 holiday season and winter boots and other accessories should also see double-digit growth of approximately 16% and 11%, respectively.

Colder than expected temperatures are expected to affect the Midwest, mid-Atlantic, and Southeast regions into early December. According to a Weather Channel forecast, during the early winter Southeast states can expect below-average temperatures. Late in the winter season, the Northeast could experience extended cold temperatures . Based on the weather forecasts in place, how will winter-wear brands such as Uggs, North Face, and Columbia Sportswear be affected?

Uggs – innovation makes the brand popular and resilient
The Uggs brand, owned by Deckers Outdoor Corp. (NYSE: DECK  ) , is a revenue generator for the company. During the third quarter ended Sept. 30, Uggs sales rose 1.3% to $337 million versus $332.8 million last year. The rise in sales resulted from new stores and the launch of new e-commerce sites.

According to Angel Martinez, President, CEO, and Chair of the Board of Directors, the brand showed resiliency last year that was driven by innovative new products and enhanced marketing and merchandising strategies. This year's fall season was led by demand for the brand's expanded collection of casual shoes and boots. The company expects to be well positioned to attract holiday shoppers.

Deckers' full year outlook estimates that annual revenue will increase 8% and diluted EPS will increase 10% over last year .

North Face -- a thriving Outdoor/Action Sports brand
V.F. Corporation (NYSE: VFC  ) owns the North Face brand, which is part of its outdoor and action sports segment. In its third-quarter earnings report, the company reported that revenue rose to $3.3 billion for a 5% increase versus last year. The company's outdoor and action sports, jeanswear, and international and direct-to-consumer businesses drove revenue.

Revenue for outdoor and action sports rose 6% to $2 billion in the third quarter and North Face's revenue rose 3% worldwide, as expected. Direct-to-consumer sales grew by more than 25%. Revenue, however, was flat for the company's wholesale business due to late-in-the-year shipments because of a change in the calendar. The company's 2013 guidance calls for revenue of $11.5 billion and expects that gross margin should approach 48% for an increase of 150 basis points over 2012.

Columbia sees a return to growth in 2014
Columbia Sportswear Company (NASDAQ: COLM  ) is considered a leader in active outdoor apparel and footwear market. During the company's third-quarter earnings call, management noted a "cautious approach" by their wholesalers in placing orders for winter products. The company is focusing on controlling its inventory levels, along with other costs, to improve sales growth going into 2014.

The company's third-quarter 2013 net income was $54.6 million, or $1.57 per diluted share, versus last year's net income of $64.4 million, or $1.88 per diluted share . As far as the impact of weather on the fourth quarter, the company anticipates "normal weather," and management noted that some parts of the U.S. have experienced colder than normal temperatures. Cold weather in Russia has had a positive impact, and overall the company believes that by maintaining a reduced inventory they are in a good position regardless of weather conditions .

My Foolish conclusion
An extended or colder-than-usual winter season should provide a boost to sales of outdoor and winter-wear brands and positively impact revenues at these apparel companies. Good inventory management will be key in meeting demand, as wholesale buyers try to determine what cautious consumers will purchase throughout the winter season.

Check out the Fool's favorite stock
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2766556, ~/Articles/ArticleHandler.aspx, 5/31/2016 4:23:22 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,787.13 -86.09 -0.48%
S&P 500 2,096.95 -2.11 -0.10%
NASD 4,948.06 14.55 0.29%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/31/2016 4:00 PM
COLM $53.17 Down -0.20 -0.37%
Columbia Sportswea… CAPS Rating: ****
DECK $52.59 Down -0.60 -1.13%
Deckers Outdoor CAPS Rating: ****
VFC $62.32 Down -0.08 -0.13%
VF Corp CAPS Rating: *****