Let’s dig into the relative performance of Torrid (NYSE: CURV) and its peers as we unravel the now-completed Q1 apparel retailer earnings season.
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.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 print fell short of analysts’ expectations by 1.6%. Overall, it was a slower quarter for the company with a significant miss of analysts’ gross margin estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.
Lisa Harper, Chief Executive Officer, stated, “I’m proud of the strong progress we made this quarter across our strategic initiatives. We delivered first quarter results in line with expectations, with $266 million in net sales and $27.1 million in Adjusted EBITDA(1)—reflecting our continued focus on disciplined execution and profitability.”
Torrid delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 45.9% since reporting and currently trades at $2.70.
Read our full report on Torrid 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 a solid beat of analysts’ EPS and EBITDA estimates.
Urban Outfitters achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 23.8% since reporting. It currently trades at $73.80.
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 3.3% since the results and currently trades at $11.55.
Read our full analysis of American Eagle’s results here.
Gap (NYSE: GAP)
Operating under the Gap, Old Navy, Banana Republic, and Athleta brands, Gap (NYSE: GAP) is an apparel and accessories retailer selling casual clothing to men, women, and children.
Gap reported revenues of $3.46 billion, up 2.2% year on year. This result surpassed analysts’ expectations by 1.3%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
The stock is down 27.1% since reporting and currently trades at $20.38.
Read our full, actionable report on Gap here, it’s free.
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 topped analysts’ expectations by 0.8%. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ gross margin estimates.
Victoria's Secret scored the highest full-year guidance raise among its peers. The stock is down 6.1% since reporting and currently trades at $20.85.
Read our full, actionable report on Victoria's Secret here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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