Looking back on apparel retailer stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Victoria's Secret (NYSE: VSCO) and its peers.
Apparel sales are not driven so much by personal needs but by seasons, trends, and innovation, and over the last few decades, the category has shifted meaningfully online. Retailers that once only had brick-and-mortar stores are responding with omnichannel presences. The online shopping experience continues to improve and retail foot traffic in places like shopping malls continues to stall, so the evolution of clothing sellers marches on.
The 9 apparel retailer stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line.
While some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.3% since the latest earnings results.
Victoria's Secret (NYSE: VSCO)
Spun off from L Brands in 2020, Victoria’s Secret (NYSE: VSCO) is an intimate clothing and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.
Victoria's Secret reported revenues of $1.35 billion, flat year on year. This print exceeded analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EPS estimates but a significant miss of analysts’ gross margin estimates.
“I am proud of the team and their commitment to adapting and remaining flexible in this challenging and fast-changing environment. We focused on proactively managing the business ensuring we are remaining nimble and protecting investments in what matters most—the customer experience, brand health and product innovation. I am pleased with the strength the business demonstrated during the March and April timeframe, which included continued momentum in our powerhouse Beauty business, ongoing strength in PINK apparel, and newness in sport and swim as we reclaim our position as a full lifestyle brand,” said VS&Co CEO Hillary Super.
Victoria's Secret pulled off the highest full-year guidance raise of the whole group. Even though it had a relatively good quarter, the market seems discontent with the results. The stock is down 34.4% since reporting and currently trades at $20.29.
Is now the time to buy Victoria's Secret? Access our full analysis of the earnings results here, it’s free.
Best Q1: Urban Outfitters (NASDAQ: URBN)
Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.
Urban Outfitters reported revenues of $1.33 billion, up 10.7% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Urban Outfitters delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 34.4% since reporting. It currently trades at $80.15.
Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: American Eagle (NYSE: AEO)
With a heavy focus on denim, American Eagle Outfitters (NYSE: AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
American Eagle reported revenues of $1.09 billion, down 4.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 14.4% since the results and currently trades at $12.79.
Read our full analysis of American Eagle’s results here.
Torrid (NYSE: CURV)
Promoting a message of body positivity and inclusiveness, Torrid Holdings (NYSE: CURV) is a plus-size women’s apparel and accessories retailer.
Torrid reported revenues of $266 million, down 4.9% year on year. This number missed analysts’ expectations by 1.6%. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ gross margin estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.
Torrid had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 54.7% since reporting and currently trades at $2.26.
Read our full, actionable report on Torrid here, it’s free.
Lululemon (NASDAQ: LULU)
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Lululemon reported revenues of $2.37 billion, up 7.3% year on year. This print was in line with analysts’ expectations. Zooming out, it was a slower quarter as it recorded EPS guidance for next quarter missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations.
The stock is down 40.3% since reporting and currently trades at $196.90.
Read our full, actionable report on Lululemon here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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