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Apparel Retailer Stocks Q2 In Review: American Eagle (NYSE:AEO) Vs Peers

StockStory - Wed Oct 18, 2023

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As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today we are looking at the apparel retailer stocks, starting with American Eagle (NYSE:AEO).

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 10 apparel retailer stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 1.9% while next quarter's revenue guidance was 1.53% below consensus. Tech stocks have been hit the hardest as investors start to value profits over growth, but apparel retailer stocks held their ground better than others, with the share prices up 13.2% on average since the previous earnings results.

American Eagle (NYSE:AEO)

With a heavy focus on denim, American Eagle Outfitters (NYSE:AEO) is a multi-brand specialty retailer offering an assortment of apparel and accessories 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.

“I am pleased to report second quarter revenue and operating profit that exceeded our expectations. Demand picked up in June and July reflecting brand strength and on trend collections that are resonating well with customers, supported by exciting new marketing campaigns. It’s encouraging to see positive momentum continue into the third quarter, across brands and channels,” commented Jay Schottenstein, AEO’s Executive Chairman of the Board and Chief Executive Officer.

American Eagle Total Revenue

The stock is up 4.59% since the results and currently trades at $18.

Is now the time to buy American Eagle? 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) has evolved to become a specialty retailer selling its own brand of fashionable clothing to young adults.

Abercrombie and Fitch reported revenues of $935.3 million, up 16.2% year on year, outperforming 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 Total Revenue

Abercrombie and Fitch achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 52.9% since the results and currently trades at $62.8.

Is now the time to buy Abercrombie and Fitch? Access our full analysis of the earnings results here, it's free.

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.

Torrid had the slowest revenue growth and weakest full-year guidance update in the group. The stock is up 1.81% since the results and currently trades at $2.25.

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 $1.27 billion, up 7.5% year on year, surpassing analyst expectations by 1.87%. 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% since the results and currently trades at $34.39.

Read our full, actionable report on Urban Outfitters 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 $160 million, down 4.97% year on year, surpassing analyst expectations by 5.99%. 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 down 5.01% since the results and currently trades at $8.54.

Read our full, actionable report on Tilly's here, it's free.

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The author has no position in any of the stocks mentioned