Originally Posted by
BlackPeter
I hear you ... and I agree that people will always need clothing, even in a depression. However - do they really need new and fashionable (i.e. fast outdated) clothing and do they really need to replace their wardrobe every season?
I am pretty sure that most of us could well survive for the next decade without the need to buy any (or hardly any) new clothes (well, maybe with the exception of replacing from time to time underwear and socks) - well, we could. And even if the fashion freaks under us choose to replace their stuff only every other year instead of every season, revenue will drastically drop.
I don't want to rain onto the parade, but linear extrapolations are always dangerous, given that most things in life move in circles. We well might have reached peak cloth buying season for some time.
Yes, if HLG keeps growing as it did the recent years, and if it manages to keep the margins as it did the recent years, it is still reasonable priced, but didn't we think the same thing with many other shares short before they reached their peaks?
This share clearly has a place in any income portfolio, but not quite sure whether now is really the time to buy or accumulate ...
Discl: used to hold in the past, but not now.