The retail industry is witnessing a significant increase in sales, driven by increasing back-to-school spending. Analysts expect apparel sales to climb substantially as schools and colleges reopen and leading players like Levi Strauss & Co. (NYSE:LEVI) and American Eagle Outfitters , Inc. (NYSE:AEO) should benefit. But which of these stocks is a better buy now? Read more to find out.Levi Strauss & Co. (LEVI) is one of the world's largest brand-name apparel companies. It designs, markets, and sells jeans, casual and dress pants, tops, shorts, skirts, jackets, footwear, and related accessories for men, women, and children in the Americas, Europe, and Asia. On the other hand, American Eagle Outfitters, Inc. (AEO) is a leading global specialty retailer that provides clothing, accessories, and personal care products under the American Eagle and Aerie brands.
With back-to-school season gearing up, the retail industry should witness a rapid rise in its sales. According to the National Retail Federation (NRF), total back-to-school spending is expected to reach an all-time high of $37.10 billion, up from $33.90 billion last year. In particular, apparel sales are expected to have a steep jump of about 78% compared with the back-to-school season in 2020. Both LEVI and AEO are well-positioned to benefit from the increase in spending.
LEVI has gained 9.9% over the past six months, while AEO has returned 5.8% over the period. However, AEO’s 34% gains year-to-date compares with LEVI’s 32% returns. In terms of last year’s performance, AEO is the clear winner with 113.3% gains versus LEVI’s 111.2%.