As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the apparel retailer industry, 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 very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was in line.
Luckily, apparel retailer stocks have performed well with share prices up 11.9% on average 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 $2.57 billion, up 7.1% year on year. This print exceeded analysts’ expectations by 3.7%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $187.66.
Best Q3: 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 $239.1 million, up 7.5% year on year, outperforming analysts’ expectations by 2%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.9% since reporting. It currently trades at $26.76.
Is now the time to buy Zumiez? Access our full analysis of the earnings results here, it’s free.
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 $235.2 million, down 10.8% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
Torrid delivered the highest full-year guidance raise but had the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 17.6% since the results and currently trades at $1.08.
Read our full analysis of Torrid’s results here.
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 $1.53 billion, up 12.3% year on year. This number surpassed analysts’ expectations by 2.6%. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
Urban Outfitters pulled off the fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $68.37.
Read our full, actionable report on Urban Outfitters 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 $1.47 billion, up 9.2% year on year. This result topped analysts’ expectations by 4.5%. Overall, it was an exceptional quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.
Victoria's Secret delivered the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 55.3% since reporting and currently trades at $64.55.
Read our full, actionable report on Victoria's Secret here, it’s free.
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