There could be good news ahead for apparel and retail after a bleak 2016: Moody’s Investors Service says prospects will be bright (read: more profitable) in the coming year.
A strong dollar, weak traffic, too much-inventory—which led to too many promotions—and conditions that were tougher than expected, set retailers up for a lackluster 2016, Moody’s said in a report out Thursday. Analysts said apparel sector performance will likely swing to a 5.5% decline, far below projections earlier in the year for 1 percent to 3 percent growth.
On a more positive note, analysts said, “We expect prospects to brighten next year, when constant currency operating profit growth resumes on the back of easier comparisons to this year.”
Operating profit growth is expected to accelerate to between 5 percent and 7 percent in 2017, though slightly lower than the 6 percent to 8 percent Moody’s initially projected.
Read more at Sourcing Journal.