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 satisfactory Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 1.6% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.2% since the latest earnings results.
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 $147.3 million, down 14.9% year on year. This print fell short of analysts’ expectations by 7.9%. Overall, it was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ EPS estimates.
Tilly's Total Revenue
Tilly's delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 54% since reporting and currently trades at $1.50.
Operating under the Gap, Old Navy, Banana Republic, and Athleta brands, Gap (NYSE:GAP) is an apparel and accessories retailer selling casual clothing to men, women, and children.
Gap reported revenues of $4.15 billion, down 3.5% year on year, outperforming analysts’ expectations by 1.9%. The business had a very strong quarter with an impressive beat of analysts’ EPS and EBITDA estimates.
Gap Total Revenue
The market seems happy with the results as the stock is up 18.3% since reporting. It currently trades at $23.06.
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 $1.58 billion, up 9.1% year on year, exceeding analysts’ expectations by 1.2%. Still, it was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations.
As expected, the stock is down 26.4% since the results and currently trades at $70.79.
With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a specialty retailer offering an assortment of apparel and accessories to young adults.
American Eagle reported revenues of $1.60 billion, down 4.4% year on year. This print met analysts’ expectations. It was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
The stock is down 3.6% since reporting and currently trades at $11.08.
Spun off from L Brands 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 $2.11 billion, up 1.1% year on year. This result surpassed analysts’ expectations by 1%. It was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
Victoria's Secret had the weakest full-year guidance update among its peers. The stock is down 11.6% since reporting and currently trades at $19.62.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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