Deutsche Bank Comments on the Apparel Sector

Despite risks from a “weak consumer, merchandise margin pressure, and prospects for increased promotions at the department and specialty stores, we continue to believe that the off-price sector is well positioned for 2H,” Deutsche Bank reports. “Specifically, off-price names retailers should benefit from both a macro environment within which department/specialty stores may have difficulty forecasting 2H sales/inventory trends, and meaningfully easier off-price comp compares over the next three quarters versus the prior three quarters,” Deutsche Bank writes. Gap Inc. GPS, which closed Monday at $17.83, is one of the companies mentioned in the report.