Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Zumiez (NASDAQ:ZUMZ) 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 mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.2% since the latest earnings results.
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 $184.3 million, up 3.9% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations significantly.
Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “Our North American business showed resilience during the first quarter despite increased macroeconomic uncertainty following the implementation of higher tariffs. Consumers continue to respond positively to our merchandise assortments and shopping experience evidenced by strong full price selling that drove sales growth above the Q4 run rate for North America. In response to the current global trade environment, we have further diversified our North America supply chain and expect a meaningful reduction in exposure to China by the end of this year.”
Interestingly, the stock is up 2.7% since reporting and currently trades at $13.21.
Read our full report on Zumiez here, it’s free.
Best Q1: Urban Outfitters (NASDAQ:URBN)
Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ:URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.
Urban Outfitters reported revenues of $1.33 billion, up 10.7% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with a solid beat of analysts’ EPS and EBITDA estimates.
Urban Outfitters pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.9% since reporting. It currently trades at $72.67.
Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.09 billion, down 4.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 11.2% since the results and currently trades at $9.93.
Read our full analysis of American Eagle’s results here.
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 $3.46 billion, up 2.2% year on year. This result topped analysts’ expectations by 1.3%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.
The stock is down 27.8% since reporting and currently trades at $20.17.
Read our full, actionable report on Gap here, it’s free.
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 $1.35 billion, flat year on year. This print beat analysts’ expectations by 0.8%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ gross margin estimates.
Victoria's Secret delivered the highest full-year guidance raise among its peers. The stock is down 14.1% since reporting and currently trades at $19.08.
Read our full, actionable report on Victoria's Secret here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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