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Morgan Stanley Answers Which Apparel, Footwear Companies Will Benefit From Lower Gas Prices

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Morgan Stanley Answers Which Apparel, Footwear Companies Will Benefit From Lower Gas Prices

A team of analysts at Morgan Stanley concluded that lower gas prices help apparel, footwear and textile companies that typically serve lower-income consumers.

In a research report published this week, the analysts state that higher-income consumers spend a small percentage of total income on gas, thus the recent decline in gas prices are unlikely to change their spending habits. On the other hand, fuel costs make up a large percentage of lower-income consumer spending, so any relief from gas prices could result in higher discretionary spending.

Therefore, apparel, footwear and textile stores and brands that target lower income consumers will benefit the most.

The analysts list the following companies as benefiting:

  • Childrens Place Inc (NASDAQ: PLCE) middle-income customers could benefit from gas price savings.
  • Foot Locker, Inc. (NYSE: FL) sells premium products and higher prices to mostly lower-income consumers.
  • Finish Line Inc (NASDAQ: FINL) also targets lower-income consumers who may choose to spend rather than save additional discretionary income.
  • Brown Shoe Company, Inc. (NYSE: BWS) along with Skullcandy Inc (NASDAQ: SKUL) both target price-sensitive customers who could choose to spend their fuel savings.

Image credit: Takahiro Nagao, Flickr

Latest Ratings for FINL

DateFirmActionFromTo
Jun 2018Bank of AmericaTerminatesNeutralNeutral
Jun 2018Cowen & Co.TerminatesMarket PerformMarket Perform
Mar 2018CitigroupUpgradesSellNeutral

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