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TheStreet Open House

5 Top Apparel Stocks: Earnings Preview

Stocks in this article: ICON HBI MFB PERY WRC

NEW YORK ( TheStreet) -- Apparel stocks are poised to report strong third-quarter earnings, but the real interest will be fourth-quarter guidance and any inside peaks into 2011.

Cost pressures are expected to get tougher moving into the end of the year and start of 2011, which will be on investors' minds as Hanesbrands (HBI) kicks off earnings on Wednesday.

"While the story for 2010 was primarily of easy inventory comparisons and the return to prominence of the department store sector, we believe 2011 will be a case of the 'big getting bigger,' as dominant players take further market share and international players capture further high margin expansion, Brean Murray analyst Eric Beder, who has a buy rating on the apparel universe, wrote in a note.

There's plenty of upside for apparel makers in the third quarter, with easy inventory comparisons, strong department store results, the weak dollar and still limited cost pressures.

While the fourth quarter will continue to see easy inventory comparisons, it will begin to stiffen going forward and become negative in 2011, Beder wrote.

So who are the dominant players of the apparel universe? Here's a look at how apparel stocks are poised to fair heading into third-quarter earnings....

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