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 Urban Outfitters (NASDAQ: URBN) 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 12.8% since the latest earnings results.
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 $1.64 billion, up 9.4% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ gross margin estimates.
“We are pleased to announce record Q4 revenues and full-year profits,” said Richard A. Hayne, Chief Executive Officer.
Interestingly, the stock is up 1% since reporting and currently trades at $53.50.
Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.
Best Q4: 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 $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.
The market seems happy with the results as the stock is up 17.7% since reporting. It currently trades at $22.95.
Is now the time to buy Gap? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $1.58 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 26.2% since the results and currently trades at $70.98.
Read our full analysis of Abercrombie and Fitch’s results here.
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 $1.60 billion, down 4.4% year on year. This number met analysts’ expectations. Overall, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is down 2.5% since reporting and currently trades at $11.20.
Read our full, actionable report on American Eagle here, it’s free.
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 $279.2 million, flat year on year. This result was in line with analysts’ expectations. More broadly, it was a mixed quarter as it also produced an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations significantly.
The stock is down 7.3% since reporting and currently trades at $11.83.
Read our full, actionable report on Zumiez 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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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