Top Apparel Stocks to Watch, According to Bernstein

Investing.com reports that Bernstein analysts have rated key U.S. apparel and specialty retail companies, spotlighting growth prospects in athletic footwear and sportswear sectors amidst evolving consumer trends and market competition. The analysts highlight brands expanding their market presence through product innovation, wholesale distribution enhancements, and geographical reach, while flagging risks for those contending with intensified competition and product hurdles.

Adidas (ADS.GR) is anticipated to boost its U.S. market share from a modest starting point, driven by a robust Lifestyle segment, a strengthened Running line, and improved wholesale distribution. The brand stands to gain from casual footwear trends and World Cup-themed apparel, with Bernstein projecting a 7% annual growth rate in U.S. sales through 2030, expanding its market share from 3.5% to 4.3%.

Adidas recently announced record quarterly sales for Q2 2026 but fell short of earnings per share expectations. Nike (ADDYY) is set to recover through enhanced product innovation and refined wholesale distribution, especially as the company broadens its reach with Sporting Goods, Outdoor, and Running retailers. Bernstein estimates Nike's U.S. gross merchandise volume (GMV) to grow at a 3%-4% compound annual rate through 2030, aligning closely with industry averages.

The company's upside potential includes a possible resurgence in the Jordan brand if Nike's innovation strategy reignites interest by 2027-28. Nike faced a downgrade to Underweight by JPMorgan due to concerns over strategic financial implications. Lululemon (LULU) is projected to experience flat U.S. sales through 2030, with market share slipping from 3.3% to 2.8%, as competition from premium brands such as Alo and Vuori intensifies.

The firm notes the challenges Lululemon faces in the face of rising competition and product-related issues. Deckers Outdoor (DK) shows potential upside if its Hoka and Ugg segments can overcome innovation and competitive pressures, driven by a possible pricing strategy to counteract tariff impacts. Bernstein remains cautious about Deckers' margins due to potential cost inflation and operational expenses. The article was AI-assisted and edited for accuracy.