Invast Blog

Luxury brands on the highway – Investment Insights

We wrote about US Defence stocks on Tuesday and pointed to the political impact that could influence these stocks as we approach the year end election. A standout among the strategies on our PortfolioInvestor platform has been Luxury Brands – they got punished when the market came down early this year but the recent recovery has seen many of these stocks posting significant gains.* Abercrombie & Fitch has been one of the key standout performers, up more than 24% for the month ending 18 March.*

According to Forbes Magazine, Abercrombie logged its first same-store sales rise in more than three years during its latest quarter, suggesting the struggling teen retailer has turned a corner. Thanks to strength at its Hollister brand, sales at existing stores rose 1% in the quarter ending January 30, beating analyst estimates of a 0.1% decline. Abercrombie also reported a surge in profits as it dialled back the number of promotions it ran over the holidays. Investors reacted positively to the strong results and sent shares up 7% on the day of the announcement. Gains have continue to flow since.

Abercrombie is reaping the rewards of an intentional corporate turnaround strategy. Those who know the brand will note that it has cut back on its logoed apparel, remodelled stores and shifted away from its infamous sexy advertising. It’s also closing stores one after another – to the tune of about 60 per year – so it can throw more of its weight behind e-commerce. Perhaps a little, but never too late to make important changes.

Other companies in the strategy have also done very well over the month. PVH, Fiat and American Eagle are also up more than 15% over the same period, while higher end brand Tiffany & Co. is slightly lagging its peers.*

To find out more about Invast’s PortfolioInvestor platform – and strategies like Luxury Brands – click here.

Best regards,

Invast Investment Committee

These are our initial impressions only, please make sure you always read all disclaimers on this website and individual reports very carefully. The Invast team of advisors are happy to answer any questions you may have, so give us a call today on 1800 468 278 or email support@invast.com.au. Alternatively, use our live chat facility on invast.com.au.

*Past performance is not indicative of future performance. The calculation of the returns is based on the performance of the actual underlying securities, in accordance with the weighting envisaged by the portfolio. These performances exclude financing and commission costs.

Featured Portfolios

The Invast PortfolioInvestor platform offers a collection of Strategic Investment Portfolios (SIPs). SIPs are professionally researched and constructed portfolios of CFDs over underlying stocks and ETFs, which reflect popular market themes or strategies. You can buy SIPs across local and international stock exchanges in one click.

American Defence US

American Defence US

A selection of companies which will benefit from an increase in military spending and defence budgets as tensions grow worldwide.

 

Luxury Brands

Luxury Brands

This SIP is a portfolio stocks that are in the business of luxury living.

 

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