Wrapping up Q1 earnings, we look at the numbers and key takeaways for the apparel retailer stocks, including Lululemon (NASDAQ:LULU) 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. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 0.6% above.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and while some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.
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. This print was in line with analysts’ expectations, but 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.
Calvin McDonald, Chief Executive Officer, stated: "In the first quarter, we saw strong momentum in our international markets, demonstrating how our brand continues to resonate around the world. Guests responded well to our product innovations across categories, and we are pleased by the progress we are making to optimize our U.S. product assortment. Looking ahead, we continue to have a significant runway for growth and are confident in our team’s ability to powerfully deliver for our guests in 2024 and beyond. "
Lululemon delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 21.5% since reporting and currently trades at $242.13.
Is now the time to buy Lululemon? Find out by reading the original article on StockStory, it’s free.
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 35.3% since reporting. It currently trades at $26.12.
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% since the results and currently trades at $4.70.
Abercrombie and Fitch (NYSE: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, surpassing analysts’ expectations by 5.8%. Zooming out, 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.
Abercrombie and Fitch pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $153.60.
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. Revenue aside, it was a strong quarter for the company with a solid beat of analysts’ earnings and gross margin estimates.
American Eagle had the weakest performance against analyst estimates among its peers. The stock is down 10.7% since reporting and currently trades at $21.45.
This content was originally published on Stock Story
