Looking back on apparel retailer stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Victoria's Secret (NYSE: VSCO) 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 Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 0.5% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Victoria's Secret (NYSE: VSCO)
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 $1.46 billion, up 3% year on year. This print exceeded analysts’ expectations by 4%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS and EBITDA estimates.
“I am excited to share that our momentum continued building in the second quarter, once again delivering results that beat our sales and operating income guidance. We delivered comparable sales growth in both Victoria’s Secret and PINK, in North America and across the globe, and in our stores and online channels. These results reflect disciplined execution, the power of the evolving Victoria’s Secret and PINK brands, and early progress on our Path to Potential strategy. The business was strong throughout the quarter and accelerated in July and into August, driven by product innovation, newness and evolved storytelling that is connecting with both existing and new customers,” said VS&Co Chief Executive Officer Hillary Super.
Victoria's Secret achieved the biggest analyst estimates beat and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 12.2% since reporting and currently trades at $25.54.
Is now the time to buy Victoria's Secret? Access our full analysis of the earnings results here, it’s free.
Best Q2: American Eagle (NYSE: AEO)
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 $1.28 billion, flat year on year, outperforming analysts’ expectations by 4%. The business had an incredible quarter with a beat of analysts’ EPS and gross margin estimates.
The market seems happy with the results as the stock is up 32% since reporting. It currently trades at $18.01.
Is now the time to buy American Eagle? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $262.8 million, down 7.7% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
Torrid delivered the slowest revenue growth in the group. As expected, the stock is down 24.3% since the results and currently trades at $1.81.
Read our full analysis of Torrid’s results here.
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 $1.21 billion, up 6.6% year on year. This print topped analysts’ expectations by 0.7%. More broadly, it was a satisfactory quarter as it also produced a beat of analysts’ EPS estimates but EPS guidance for next quarter missing analysts’ expectations.
The stock is down 9.2% since reporting and currently trades at $87.86.
Read our full, actionable report on Abercrombie and Fitch here, it’s free.
Gap (NYSE: GAP)
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 $3.73 billion, flat year on year. This number met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.
The stock is up 4.2% since reporting and currently trades at $22.59.
Read our full, actionable report on Gap here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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