10 Footwear Apparel Stocks Affected By China Tariffs

8. Revolve Group Inc. (NYSE:RVLV)

Revolve Group Inc. is an online fashion retailer that operates through FWRD and REVOLVE segments. It provides a curated selection of beauty, apparel, accessories, home products, and footwear. The company sources 14% of its products from China.

KeyBanc recently upgraded RVLV from Sector Weight to Overweight prior to the upcoming Q4 financial results and assigned it the target price of $37. Previously KeyBanc analyst Ashley Owens had downgraded the stock stemming from concerns over revenue stress, inventory rightsizing, and enhanced return rates. As per the recent upgrade, analysts changed their pessimistic point of view and believe that the company is well-positioned to return to steady growth revenue and increased margins at the start of the year. This change in analysts’ view comes amid expectations of margin expansion and strategic investments.

Analysts highlighted that the brokerage anticipates more strategic investments in technology aimed at improving search engine optimization and further lower return rates.

With this, we foresee continued logistics cost efficiencies, stabilized/improving AOV, as well as product mix normalization, which should drive further margin accretion.

As stated by the analyst, the company is projected to improve margins through stable average order value (AOV) and cost efficiencies. With a stock performance of over 110% gain in the previous year, the recent downturn in the share price can be taken as a buying opportunity.