IF ATZ could resume its previous growth trend of double-digit going forward, the market could rerate the company’s valuation and we could see the stock exceed the highs in 2021 if that is the case.
Having said that, one quarter does not make a trend, but the prior problems seem to be disappating as inventory is under controlled and sales growth reaccelerates. We still like ATZ but given the giant move of the past few days, we think we would start with a half position. Investing in fashion brands are quite tough, as the fashion trend may pass, we think it is safer to ride with strong, iconic brand names like LULU, NKE.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in NKE.