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 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. The start of 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 4.7% on average since the previous 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 $279.8 million, down 4.8% year on year, in line with analysts' expectations. Overall, it was a strong quarter for the company with an impressive beat of analysts' earnings estimates.
Lisa Harper, Chief Executive Officer, stated, “We are pleased with our start to fiscal 2024. In the first quarter we delivered higher-than-expected Adjusted EBITDA(1) driven by strong gross margin expansion, while maintaining our focus on tightly controlling inventory levels. Our customers responded positively to our ongoing assortment changes, leading to improved traffic and sales throughout the quarter.”
Torrid achieved the highest full-year guidance raise of the whole group. The stock is up 16% since reporting and currently trades at $7.74.
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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 had the slowest revenue growth in the group. As expected, the stock is down 19.8% since the results and currently trades at $4.65.
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. Overall, 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 13.3% since reporting and currently trades at $20.84.
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. Overall, 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 21% since reporting and currently trades at $243.46.
This content was originally published on Stock Story
