Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Tilly's (NYSE:TLYS) and the best and worst performers in the apparel retailer industry.
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. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts 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 2.7% on average since the previous earnings results.
Weakest Q1: Tilly's (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. Overall, it was a slower quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts' earnings estimates.
"Our business continues to face many headwinds from the macro environment, but we believe we are making progress on improving our product margins and driving greater customer engagement through our marketing efforts," commented Hezy Shaked, Co-Founder and Interim President and Chief Executive Officer.
Tilly's delivered the slowest revenue growth of the whole group. The stock is down 19.8% since reporting and currently trades at $4.65.
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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 27.4% since reporting. It currently trades at $24.59.
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. It was a slower quarter for the company with a miss of analysts' gross margin and earnings estimates.
As expected, the stock is down 12.6% since the results and currently trades at $19.77.
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 $2.21 billion, up 10.4% year on year, in line with analysts' expectations. More broadly, it was a mixed quarter for the company with strong earnings guidance for the full year but full-year revenue guidance missing analysts' expectations.
Lululemon had the weakest full-year guidance update among its peers. The stock is down 22.4% since reporting and currently trades at $239.19.
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, surpassing analysts' expectations by 3.1%. More broadly, it was a stunning quarter for the company with an impressive beat of analysts' earnings and gross margin estimates.
The stock is flat since reporting and currently trades at $22.64.
This content was originally published on Stock Story
