Wrapping up Q3 earnings, we look at the numbers and key takeaways for the apparel retailer stocks, including Torrid (NYSE:CURV) 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 satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2.1% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% since the latest earnings results.
Weakest Q3: 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 $263.8 million, down 4.2% year on year. This print fell short of analysts’ expectations by 6.6%. Overall, it was a disappointing quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
Lisa Harper, Chief Executive Officer of Torrid, stated, “Our third quarter results were below our expectations as our fall assortments did not offer enough newness and novelty. We also saw the environment change meaningfully from the end of September and into October. Despite the weaker top line sales, we delivered a positive full-price comp, 285 basis points of gross profit expansion, and modest Adjusted EBITDA(1) growth. We ended the quarter with clean inventory levels, down 19% to last year, and $44 million in cash.”
Torrid delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Interestingly, the stock is up 34.1% since reporting and currently trades at $6.21.
Read our full report on Torrid here, it’s free.
Best Q3: 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 $1.36 billion, up 6.3% year on year, outperforming analysts’ expectations by 1.7%. The business had an exceptional quarter with an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 36.3% since reporting. It currently trades at $54.72.
Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.
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 $143.4 million, down 13.8% year on year, falling short of analysts’ expectations by 2.3%. It was a slower quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.
Tilly's delivered the slowest revenue growth in the group. As expected, the stock is down 13.4% since the results and currently trades at $3.74.
Read our full analysis of Tilly’s results here.
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 $222.5 million, up 2.8% year on year. This print met analysts’ expectations. It was a strong quarter as it also put up an impressive beat of analysts’ EPS and EBITDA estimates.
The stock is down 26.8% since reporting and currently trades at $14.72.
Read our full, actionable report on Zumiez 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, up 6.5% year on year. This number topped analysts’ expectations by 4.6%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
Victoria's Secret delivered the biggest analyst estimates beat among its peers. The stock is down 30.3% since reporting and currently trades at $30.
Read our full, actionable report on Victoria's Secret here, it’s free.
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