As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the apparel retailer industry, including Urban Outfitters (NASDAQ:URBN) 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 satisfactory Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2.1% below.
While some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.1% since the latest earnings results.
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 $1.36 billion, up 6.3% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ gross margin estimates and an impressive beat of analysts’ EBITDA estimates.
“We are pleased to announce record third quarter sales and earnings, both of which exceeded our expectations. These results were driven by outperformance across all three business segments – Retail, Subscription and Wholesale,” said Richard A. Hayne, Chief Executive Officer.
The stock is up 41% since reporting and currently trades at $56.61.
Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.
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 $1.35 billion, up 6.5% year on year, outperforming analysts’ expectations by 4.6%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ EPS estimates.
Victoria’s Secret pulled off the biggest analyst estimates beat among its peers. The market seems unhappy with the results as the stock is down 23.5% since reporting. It currently trades at $32.92.
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