As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the apparel retailer industry, including Abercrombie and Fitch (NYSE:ANF) 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 those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some of the apparel retailer stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.6% on average since the previous earnings results.
Abercrombie and Fitch (NYSE:ANF) Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE:ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.
Abercrombie and Fitch reported revenues of $1.02 billion, up 22.1% year on year, exceeding analysts' expectations by 5.8%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' earnings estimates and a decent beat of analysts' gross margin estimates.
Fran Horowitz, Chief Executive Officer, said, “Our outstanding first quarter results reflect the power of our brands and strong execution of our global playbook. We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations. Growth was broad-based across regions and brands with Abercrombie brands registering 31% growth and Hollister brands delivering growth of 12%. Strong top-line growth, along with gross profit rate expansion, led to record first quarter operating income and an operating margin of 12.7%.
Abercrombie and Fitch achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is down 8% since reporting and currently trades at $140.
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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 28.9% since reporting. It currently trades at $24.87.
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 3.4% since the results and currently trades at $5.60.
Torrid (NYSE: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 $279.8 million, down 4.8% year on year, in line with analysts' expectations. More broadly, it was a mixed quarter for the company with revenue guidance for the next quarter falling below expectations.
Torrid scored the highest full-year guidance raise among its peers. The stock is up 19.6% since reporting and currently trades at $7.98.
American Eagle (NYSE:AEO) With a heavy focus on denim, American Eagle Outfitters (NYSE:NYSE:AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
American Eagle reported revenues of $1.14 billion, up 5.8% year on year, in line with analysts' expectations. Zooming out, it was a strong quarter for the company with a solid beat of analysts' earnings estimates.
American Eagle had the weakest performance against analyst estimates among its peers. The stock is down 12.7% since reporting and currently trades at $20.97.
This content was originally published on Stock Story
