As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the apparel, accessories and luxury goods industry, including Carter's (NYSE:CRI) and its peers.
Within apparel and accessories, not only do styles change more frequently today than decades past as fads travel through social media and the internet but consumers are also shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some apparel, accessories, and luxury goods companies have made concerted efforts to adapt while those who are slower to move may fall behind.
The 17 apparel, accessories and luxury goods stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 12.6% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
In light of this news, apparel, accessories and luxury goods stocks have held steady with share prices up 2.5% on average since the latest earnings results.
Carter's (NYSE:CRI)
Rumored to sell more than 10 products for every child born in the United States, Carter's (NYSE:CRI) is an American designer and marketer of children's apparel.Carter's reported revenues of $564.4 million, down 6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with underwhelming earnings guidance for the full year.
“We achieved our second quarter sales and earnings objectives,” said Michael D. Casey, Chairman and Chief Executive Officer.
Interestingly, the stock is up 11% since reporting and currently trades at $66.35.
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Best Q2: Figs (NYSE:FIGS)
Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE:FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.Figs reported revenues of $144.2 million, up 4.4% year on year, outperforming analysts’ expectations by 1.4%. The business had a very strong quarter with an impressive beat of analysts’ earnings and operating margin estimates.
The market seems happy with the results as the stock is up 8.2% since reporting. It currently trades at $6.18.
Weakest Q2: Guess (NYSE:GES)
Flexing the iconic upside-down triangle logo with a question mark, Guess (NYSE:GES) is a global fashion brand known for its trendy clothing, accessories, and denim wear.Guess reported revenues of $732.6 million, up 10.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted underwhelming earnings guidance for the next quarter.
As expected, the stock is down 8% since the results and currently trades at $18.58.
VF Corp (NYSE:VFC)
Owner of The North Face, Vans, and Supreme, VF Corp (NYSE:VFC) is a clothing conglomerate specializing in branded lifestyle apparel, footwear, and accessories.VF Corp reported revenues of $1.77 billion, down 10.1% year on year. This result came in 4.1% below analysts' expectations. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ constant currency revenue estimates but a miss of analysts’ EBITDA estimates.
The stock is up 8.9% since reporting and currently trades at $17.89.
Kontoor Brands (NYSE:KTB)
Founded in 2019 after separating from VF Corporation (NYSE:VFC), Kontoor Brands (NYSE:KTB) is a clothing company known for its high-quality denim products.Kontoor Brands reported revenues of $606.9 million, down 1.5% year on year. This number topped analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ earnings estimates.
Kontoor Brands scored the highest full-year guidance raise among its peers. The stock is up 10.6% since reporting and currently trades at $77.67.
This content was originally published on Stock Story
