Unpacking Q2 Earnings: Torrid (NYSE:CURV) In The Context Of Other Apparel Retailer Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s have a look at how the apparel retailer stocks have fared in Q2, starting with Torrid (NYSE:CURV).
Apparel sales are not driven so much by personal need 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 10 apparel retailer stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 1.9%, while on average next quarter revenue guidance was 1.53% under consensus. Investors abandoned cash burning companies since high interest rates will make it harder to raise capital , but apparel retailer stocks held their ground better than others, with the share prices up 9.62% since the previous earnings results, on average.
Weakest Q2: 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 $289.1 million, down 15.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and revenue guidance for next quarter missing analysts' expectations.
Lisa Harper, Chief Executive Officer, stated, “Our second quarter results were in line with our guidance, reflecting our commitment to disciplined expense and inventory management even amidst a challenging market. We maintain that fiscal 2023 is a pivotal 'rebuild year' for us. Our laser focus is on balancing our merchandise assortment through exceptional value and product offerings, while expanding our customer base through a robust omnichannel strategy. We are confident that this will set the stage for sustainable long-term growth. "
Torrid delivered the slowest revenue growth and weakest full year guidance update of the whole group. The stock is down 8.6% since the results and currently trades at $2.02.
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 an impressive beat of analysts' earnings estimates and an impressive beat of analysts' revenue estimates.
Abercrombie and Fitch delivered the strongest analyst estimates beat and fastest revenue growth among its peers. The stock is up 50.5% since the results and currently trades at $61.97.
Is now the time to buy Abercrombie and Fitch? Access our full analysis of the earnings results here, it's free.
Victoria's Secret (NYSE:VSCO)
Spun off from L Brands in 2020, Victoria’s Secret (NYSE:VSCO) is an intimates and beauty retailer that sells its own brands of lingerie, undergarments, and personal fragrances.
Victoria's Secret reported revenues of $1.43 billion, down 6.19% year on year, missing analyst expectations by 0.76%. It was a weak quarter for the company, with a miss of analysts' gross margin estimates and a miss of analysts' earnings estimates.
The stock is down 9.3% since the results and currently trades at $16.29.
American Eagle (NYSE:AEO)
With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a specialty retailer that sells its own brands of fashionable clothing to young adults.
American Eagle reported revenues of $1.2 billion, flat year on year, in line with analyst expectations. It was a mixed quarter for the company, with an impressive beat of analysts' earnings estimates but a miss of analysts' gross margin estimates.
The stock is up 1.16% since the results and currently trades at $17.41.
With a style that ranges from casual to dressy, Chico’s FAS (NYSE:CHS) is a women’s apparel and accessories retailer that operates multiple brands.
Chico's reported revenues of $545.1 million, down 2.43% year on year, missing analyst expectations by 1.76%. It was a weak quarter for the company, with a miss of analysts' gross margin estimates and a miss of analysts' revenue estimates.
Chico's had the weakest performance against analyst estimates among the peers. The stock is up 45.9% since the results and currently trades at $7.47.
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The author has no position in any of the stocks mentioned