In late May, Statistics Canada revealed that retail sales increased for the second consecutive month. Retail sales rose 1.1% to $51.3 billion as seven of 11 subsectors posted growth. The best-performing sectors were gasoline stations, building equipment, and garden equipment and supplies dealers. Sales at clothing and clothing accessories stores also rose 3.4% in the month of March.
Top clothing equities have not fared so well in the spring of 2019. Today, we are going to look at three stocks that have either hovered around or touched 52-week lows over the past month. Which stock is the best bet in June? Let’s dive in and find out.
Canada Goose (TSX:GOOS)(NYSE:GOOS) plunged another 4.57% on June 5. Shares charted another 52-week low as Canada Goose stock has struggled mightily following the release of its fourth-quarter and full-year fiscal 2019 results. The stock has now dropped 25.8% in 2019 so far.
Shares plunged after the company’s first revenue miss since its public listing. This spooked analysts in a turbulent environment for the retail sector. Canada Goose has bucked this trend with its gradual brick-and-mortar expansion and top-end e-commerce offerings. The company has made impressive strides with its international expansion, and even a rift between Canada and China was not enough to quash excitement for its Beijing store opening.
Canada Goose now boasts a forward P/E of 34. It has ridden a wave of enthusiasm for its brand since its IPO, and investors have now been granted an opportunity to add at a much more attractive price.
Reitmans (TSX:RET) is a Toronto-based apparel retailer. Shares have plunged 26.8% week over week as of close on June 5. The stock fell 2.59% in yesterday’s trading, falling to a 52-week low of $2.26 to close out the day. Reitmans released its first-quarter 2019 results on June 3.
Sales fell $22.4 million year over year to $185.2 million. This was largely due to a net reduction of 43 stores. The company also blamed slow results on unseasonable weather. Reitmans has worked to reduce its brick-and-mortar presence and is focused on enhancing its online sales capabilities. A 5.4% drop in store traffic contributed to a 5.7% decrease in comparable sales in the first quarter, which include e-commerce sales.
Reitmans is facing major challenges as it hopes to avoid becoming a victim of the so-called retail apocalypse. Investors need to see marked improvement before betting on this volatile stock in June.
Roots (TSX:ROOT) had a difficult start after its initial public offering back in October 2017. Shares fell 4.14% on June 5. The stock is now hovering near the 52-week lows it set all the way back in late 2018. The company faces common challenges for clothing retailers, which we have gone over in this article.
Roots is set to release its first-quarter 2019 results on June 12. In 2018, the company reported a slight 0.9% increase in total sales to $329 million. It also reported a drop in comparable sales of 1.3% compared to 12.2% growth in fiscal 2017. Adjusted EBITDA dropped 20.4% year over year to $41.9 million. Roots’s growth also relies on an aggressive Asian expansion, but it is weighed down by its large traditional retail footprint.
However, Roots boasts a forward P/E of 12, which represents attractive value relative to industry. Shares had an RSI of 24 as of close on June 5, which puts the stock in technically oversold territory.
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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.