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More and more fashionable weight reduction medication aren’t solely benefitting people by decreasing their waist strains. They may very well be a boon to attire names.
Based mostly on a current proprietary survey, Stifel believes that shedding kilos might impression spending traits, and particularly, with clothes.
Its survey of customers discovered that discovered 15% of respondents are on GLP-1 drugs. Examples of those medication are Eli Lilly’s (LLY) Mounjaro (tirzepatide) and Novo Nordisk’s (NVO) Wegovy (semaglutide) and Ozempic (semaglutide).
Whereas solely Wegovy is FDA-approved for weight reduction, Mounjaro is anticipated to realize that indication shortly and was not too long ago buoyed by a real-world examine towards Wegovy. The Stifel survey discovered an extra 21% can be occupied with taking a GLP-1 drug if extra ones gained US FDA approval and had been additional demonstrated to work successfully.
Stifel’s Jim Duffy talked about a number of retail names he sees as potential beneficiaries of larger GLP-1 uptake: Lululemon (NASDAQ:LULU), Levi’s (LEVI), Kontoor Manufacturers (KTB), and Dick’s Sporting Items (DKS).
Duffy advised Yahoo! Finance in a recent interview that people who persist with a weight reduction drug and lose appreciable weight would want new garments “and would spend double the amount of apparel on an annual basis.” He added that would result in a low- to mid-single digit profit to attire spend, although centered on explicit manufacturers.
Based mostly on the outcomes, Duffy believes different industries may benefit from larger weight reduction drug use. “By sector/category, GLP-1 usage is most beneficial for energy drinks, convenient nutrition, and apparel and active lifestyle nutrition.”
That may very well be excellent news for names like Celsius Holdings (CELH), Monster Beverage (NASDAQ:MNST), The Merely Good Meals Firm (SMPL), BellRing Manufacturers (BRBR), Mondelez Worldwide (NASDAQ:MDLZ) (proprietor of Clif Bar), Basic Mills (NYSE:GIS) (a number of protein bar manufacturers), and WK Kellogg (protein bars).
