The retail landscape is evolving, with specialty retailers leading the charge in the “experience economy.” Unlike traditional retailers, these companies thrive by offering unique, tailored experiences that cater to niche markets and specific consumer preferences.
From eco-friendly products to personalized services, specialty retailers know how to build strong customer loyalty and keep buyers coming back for more. Given the industry’s strong foothold, investors could consider buying fundamentally sound specialty retailer stocks like Abercrombie & Fitch Co. (ANF), Columbia Sportswear Company (COLM), and BARK Inc. (BARK), which are thriving in this space.
Specialty retailers excel by catering to diverse consumer preferences through a seamless blend of online and offline channels, maximizing their reach and engagement. What sets these companies apart is their ability to leverage data-driven insights and direct-to-consumer (DTC) strategies. By eliminating intermediaries, they offer competitive pricing and maintain complete control over the customer experience, enabling them to adapt quickly to shifting market trends.
The global specialty retailers market is projected to reach $42.7 billion by 2031, growing at a CAGR of 4%. As e-commerce continues to rise and consumer spending grows, specialty retailers are perfectly positioned to deliver both value and growth. Meanwhile, the broader retail industry, worth $27.15 trillion, is expected to expand at a CAGR of 2.5% through 2030.
Let’s explore the fundamental aspects of the aforementioned stocks in detail:
Abercrombie & Fitch Co. (ANF)
ANF is a global specialty retailer that offers an assortment of apparel, personal care products, and accessories for men, women, and kids. The company operates under the Abercrombie & Fitch, abercrombie kids, Hollister, and Gilly Hicks brands, delivering high-quality, comfortable products catering to diverse lifestyle needs.
On December 4, 2024, ANF announced a strategic multi-year franchise partnership with Myntra Jabong India Private Ltd., the business-to-business wholesale arm of Myntra. This collaboration aims to strengthen ANF’s global presence by leveraging India’s growing e-commerce market to drive brand accessibility and revenue growth.
ANF’s trailing-12-month gross profit margin of 64.66% is 72.5% higher than the industry average of 37.49%. Its 14.84% trailing-12-month EBIT margin is 81.9% higher than the 8.15% industry average. Likewise, its 50.86% trailing-12-month Return on Common Equity compares favorably to the industry average of 10.95%.
During the fiscal third quarter that ended November 2, 2024, ANF’s net sales increased 14.4% year-over-year to $1.21 billion. Its adjusted operating income grew 25.4% from the year-ago value to $179.28 million. Its net income amounted to $133.86 million, reflecting an increase of 37% from the prior year quarter. In addition, the company’s adjusted EPS came in at $2.50, up 31.6% year-over-year.
Analysts expect ANF’s EPS and revenue for the fourth quarter ending January 31, 2025, to increase 19.6% and 7.8% year-over-year to $3.55 and $1.57 billion, respectively. The company has an impressive surprise history, surpassing the consensus revenue and EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 31% to close the last trading session at $130.35.
ANF’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
ANF has an A grade for Quality and it is ranked #11 out of 60 stocks in the B-rated Fashion & Luxury industry.
Beyond what we have stated above, we have also given ANF grades for Growth, Value, Momentum, Stability, and Sentiment. Get all the ANF’s ratings here.
Columbia Sportswear Company (COLM)
Based in Portland, Oregon, COLM is a designer and distributor of outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment. It sells its products under the brand names – Columbia, Mountain Hard Wear, SOREL, and prAna through a company-owned network of branded and outlet retail stores and brand-specific e-commerce sites.
On December 4, 2024, the company paid its shareholders a quarterly dividend of $0.30 per share. It pays an annual dividend of $1.20, which translates to a dividend yield of 1.44% at the prevailing price levels. Its four-year average dividend yield is 1.25%. Moreover, its dividend payouts have increased at a CAGR of 4.9% over the past three years.
The stock’s trailing-12-month levered FCF margin of 15.68% is 259.79% higher than the industry average of 4.36%. Likewise, its trailing-12-month cash from operations of $537.52 million is 111.18% above its industry average of $254.53 million.
COLM’s net sales for the fiscal third quarter that ended on September 30, 2024, amounted to $931.77 million, while its gross profit came in at $467.56 million with a margin of 50.2%. Its operating income for the quarter was $112.54 million. In addition, the company’s net income reached $90.16 million or $1.56 per share. As of September 30, 2024, its cash and cash equivalents stood at $306.68 million, up 43.8% year-over-year.
For the fourth quarter (ended December 31, 2024), COLM’s revenue is expected to increase by 1.1% year-over-year to $1.07 billion. Meanwhile, its EPS for the same period is estimated at $1.84. In addition, the company has topped the consensus EPS estimates in three of the trailing four quarters, which is promising.
The stock has gained 11.5% over the past nine months and 8.6% over the past year to close the last trading session at $83.62.
COLM’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system.
It has a B grade for Quality. Of the 33 stocks in the Athletics & Recreation industry, it tops the industry. To access COLM’s Growth, Value, Momentum, Stability, and Sentiment ratings, click here.
BARK, Inc. (BARK)
BARK is a dog-centric company that provides a range of monthly subscription products and services, including toys, treats, personalized meal plans, and health and wellness products under brands like BarkBox, Super Chewer, and BARK Food. It operates in two segments, Direct to Consumer and Commerce.
On December 5, 2024, BARK announced the expansion of BARK Air, the first air travel service for dogs and their owners, in collaboration with Air Wisconsin. It plans to trial larger flights with at least double the capacity and fares under $1,000, offering convenient travel between NYC and Miami/Fort Lauderdale. This expansion enhances BARK’s unique offerings and strengthens its position in the growing pet-friendly travel market.
The stock’s trailing-12-month gross profit margin of 61.95% is 64.19% higher than the industry average of 37.73%. Likewise, its trailing-12-month asset turnover ratio of 1.46x is 46.68% above the industry average of 0.99x.
BARK’s revenue increased 2.5% year-over-year to $126.11 million in the fiscal 2025 second quarter that ended on September 30, 2024. Its gross profit grew marginally from the year-ago value to $76.11 million. The company’s adjusted net income amounted to $1.26 million or $0.01 per share compared to a net loss of $1.44 million or $0.01 per share.
In addition, its adjusted EBITDA came in at $3.49 million, considerably above the year-ago value of $1 million, while its free cash flow increased 11.8% year-over-year to $966 million.
Street expects BARK’s revenue for the fiscal fourth quarter (ending March 2025) to increase 6.5% year-over-year to $129.43 million, while its EPS for the same period is estimated to come in at $0.01. In addition, it surpassed the consensus revenue estimates in three of the trailing four quarters, which is promising.
Shares of BARK have gained 117.4% over the past year and 17% over the past six months to close the last trading session at $2.
BARK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Growth and Quality. Within the Specialty Retailers industry, it is ranked #9 out of 38 stocks. Click here to see BARK’s ratings for Value, Momentum, Stability, and Sentiment.
What To Do Next?
Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:
3 Stocks to DOUBLE This Year >
ANF shares were unchanged in after-hours trading Monday. Year-to-date, ANF has declined -12.79%, versus a 1.96% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
3 Specialty Retail Stocks Thriving in the Experience Economy StockNews.com
