Apparel and Footwear Retail Stocks Q2 Results: Benchmarking Burlington (NYSE:BURL)
As Q2 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers amongst the apparel and footwear retail stocks, including Burlington (NYSE:BURL) and its peers.
Apparel and footwear was once a category thought to be relatively safe from major e-commerce penetration because of the need to try on, touch, and feel products, but the category is now meaningfully transacted online. Everyone still needs clothes and shoes to go outside unless they want some curious (or horrified) looks. But this ongoing digitization is forcing apparel and footwear retailers–that once only had brick-and-mortar stores–to respond with omnichannel offerings. The online shopping experience continues to improve and retail foot traffic in places like shopping malls continues to stagnate, so the evolution of clothing and shoes sellers marches on.
The 20 apparel and footwear retail stocks we track reported a mixed Q2; on average, revenues beat analyst consensus estimates by 1.93%, while on average next quarter revenue guidance was 0.82% under consensus. There has been a stampede out of high valuation technology stocks as raising interest rates encourage investors to value profits over growth again, but apparel and footwear retail stocks held their ground better than others, with share prices down 4.96% since the previous earnings results, on average.
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE:BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Burlington reported revenues of $2.17 billion, up 9.46% year on year, in line with analyst expectations. It was a weak quarter for the company, with revenue in line with analysts' expectations. In addition, the company lowered its full-year revenue and EPS guidance.
Michael O’Sullivan, CEO, stated, “Our comparable store sales growth for the second quarter was 4%, which was at the high end of our guidance range, while margin and earnings performance were significantly ahead of our guidance. Our strategies to deliver great value to our customers are working, and we have been helped in the execution of these strategies by very strong availability of great off-price merchandise.”
The stock is down 20.6% since the results and currently trades at $134.86.
Is now the time to buy Burlington? Access our full analysis of the earnings results here, it's free.
Best Q2: 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 $935.3 million, up 16.2% year on year, beating analyst expectations by 10.8%. It was a strong quarter for the company, with revenue and EPS exceeding expectations, driven by impressive sales growth at Abercrombie brands and a huge operating margin increase. On top of that, the company raised its full-year revenue guidance from 3% growth all the way up to 10% while changing its operating margin estimate from 5.5% to 8.5%.
Abercrombie and Fitch delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is up 25.8% since the results and currently trades at $51.76.
Is now the time to buy Abercrombie and Fitch? Access our full analysis of the earnings results here, it's free.
With a focus on small and mid-sized markets, Hibbett (NASDAQ:HIBB) is a specialty retailer that sells athletic apparel and footwear as well as select sports equipment.
Hibbett reported revenues of $374.9 million, down 4.56% year on year, missing analyst expectations by 0.33%. It was a slower quarter for Hibbett, with the company missing analysts' revenue expectations, driven by underperformance in same-store sales growth, and its gross margin dropped due to higher promotional activity across both footwear and apparel.
The stock is up 17.1% since the results and currently trades at $43.14.
Children's Place (NASDAQ:PLCE)
Offering sizes up to young teens, The Children’s Place (NASDAQ:PLCE) is a specialty retailer that sells its own brands of kid’s apparel and accessories.
Children's Place reported revenues of $345.6 million, down 9.26% year on year, in line with analyst expectations. It was a strong quarter for the Children's Place, with the company lifting its revenue guidance for the next quarter.
The stock is down 4.9% since the results and currently trades at $25.22.
The author has no position in any of the stocks mentioned