Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Gap (NYSE:GPS) 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 strong Q1; on average, revenues beat analyst consensus estimates by 1.6%. while next quarter's revenue guidance was 0.6% above consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the apparel retailer stocks have fared somewhat better than others, they collectively declined, with share prices falling 4.7% on average since the previous earnings results.
Gap (NYSE:GPS) Operating under The Gap, Old Navy, Banana Republic, and Athleta brands, The Gap (NYSE:GPS) is an apparel and accessories retailer that sells its own brand of casual clothing to men, women, and children.
Gap reported revenues of $3.39 billion, up 3.4% year on year, exceeding analysts' expectations by 3.1%. Overall, it was a stunning quarter for the company with an impressive beat of analysts' earnings estimates.
"Gap Inc (NYSE:GPS). delivered a strong quarter that exceeded expectations across key metrics. We gained market share for the 5th consecutive quarter with positive comparable sales at all brands, demonstrating improved relevance with our customers as we execute against our brand reinvigoration playbook. Our first quarter results are giving us confidence to raise both sales and operating income guidance for the full year," said Gap Inc. President and Chief Executive Officer, Richard Dickson.
The stock is down 1.9% since reporting and currently trades at $22.
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Best Q1: Zumiez (NASDAQ:ZUMZ) With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ:ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.
Zumiez reported revenues of $177.4 million, down 3% year on year, outperforming analysts' expectations by 3.4%. It was a stunning quarter for the company with optimistic earnings guidance for the next quarter and an impressive beat of analysts' gross margin estimates.
The market seems happy with the results as the stock is up 23.1% since reporting. It currently trades at $23.75.
Weakest Q1: Tilly's (NYSE:NYSE:TLYS) With an emphasis on skate and surf culture, Tilly’s (NYSE:TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.
Tilly's reported revenues of $115.9 million, down 6.3% year on year, in line with analysts' expectations. It was a slower quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts' earnings estimates.
Tilly's posted the slowest revenue growth in the group. As expected, the stock is down 19.8% since the results and currently trades at $4.65.
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 $1.20 billion, up 7.8% year on year, surpassing analysts' expectations by 1.8%. Taking a step back, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates and a decent beat of analysts' gross margin estimates.
The stock is down 3.1% since reporting and currently trades at $40.03.
Victoria's Secret (NYSE:NYSE:VSCO) Spun off from L Brands (NYSE:BBWI) 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 $1.36 billion, down 3.4% year on year, in line with analysts' expectations. Taking a step back, it was a decent quarter for the company: Same-store sales beat slightly, leading to a slight revenue beat. Full year guidance was maintained for revenue and operating profit, showing that the company is on track.
The stock is down 15.5% since reporting and currently trades at $19.10.
This content was originally published on Stock Story
