As the hectic earnings season draws to a close, we’re taking a look back at some of the most exciting (and some not so exciting) third-quarter results. Today, we’re looking at clothing retailer stocks, starting with Children’s Place (NASDAQ:PLCE).
Clothing sales are not so much driven by personal needs, but by seasons, trends and innovations. In recent decades, this category has shifted significantly online. Retailers who previously only had brick-and-mortar stores are responding with an omnichannel presence. The online shopping experience is getting better and better and customer traffic in shopping centers continues to stagnate, so the evolution of clothing sellers continues to advance.
The 10 apparel retailers we track had a strong third quarter. Overall, sales beat analyst consensus estimates by 1.7%, while next quarter’s sales forecast was 1.5% higher.
Stocks – particularly those trading at higher multiples – had a strong end to 2023, but this year has seen periods of volatility. Mixed signals on inflation have led to uncertainty about rate cuts, and while some apparel retailer stocks have done a little better than others, they have declined overall. On average, share prices have fallen 4.8% since the most recent earnings results.
Children’s Place (NASDAQ:PLCE)
The Children’s Place (NASDAQ:PLCE) is a specialty retailer that sells its own brands of children’s clothing and accessories, offering sizes up to young teens.
Children’s Place reported revenue of $480.2 million, down 5.7% year over year. This figure beat analysts’ expectations by 3.4%. Despite the top-line beat, it was still a weaker quarter for the company as gross profits were missed by analysts and earnings guidance for the next quarter was underwhelming.
Jane Elfers, President and CEO, said, “Our third quarter results exceeded our expectations for revenue. Revenue was driven by another quarter of industry-leading digital performance, driven by double-digit increases in e-commerce traffic, with strong back-to-school results in August and the success of our seasonal categories in September and October.”
Children’s Place posted the highest annual guidance increase of the entire group. Although the company had a great quarter compared to its peers, the market seems unhappy with the results. The stock has fallen 35.3% since the report and is currently trading at $26.12.
Read our full review of Children’s Place for free here.
Best Q3: Zumiez (NASDAQ:ZUMZ)
Zumiez (NASDAQ:ZUMZ) is a specialty retailer of street and skate apparel, shoes and accessories with so-called “Zumiez Stash Members”.
Zumiez reported revenue of $177.4 million, down 3% year over year and beating analyst expectations by 3.4%. It was an impressive quarter for the company, with optimistic earnings forecasts for the next quarter and an impressive beat on analysts’ gross profit estimates.
The market seems to be pleased with the results, as the stock has risen 35.3% since the release and is currently trading at $26.12.
Is now the right time to buy Zumiez? You can find our full analysis of the results here for free.
Weakest Q3: Tilly’s (NYSE:TLYS)
With a focus on skate and surf culture, Tilly’s (NYSE:TLYS) is a specialty retailer that sells clothing, shoes and accessories for fashion-conscious teens and young adults.
Tilly’s reported revenue of $115.9 million, down 6.3 percent year over year and in line with analyst expectations. It was a weaker quarter for the company, with disappointing earnings guidance for the next quarter and a miss on analysts’ earnings estimates.
Tilly’s had the slowest sales growth of the group. As expected, the stock has fallen 19% since the results were released and is currently trading at $4.70.
Read our full analysis of Tilly’s results here.
Lululemon (NASDAQ:LULU)
Originally aimed at yogis and hockey players, Lululemon (NASDAQ:LULU) is now a designer, distributor and retailer of athletic apparel for men and women.
Lululemon reported revenue of $2.21 billion, up 10.4 percent year over year, in line with analyst expectations. In detail, it was a mixed quarter for the company, with strong full-year earnings forecasts, but full-year revenue forecasts fell short of analyst expectations.
Lululemon had the weakest full-year guidance update compared to its peers. The stock has fallen 21.5% since the report and is currently trading at $242.13.
Read our full, actionable Lululemon report for free here.
Victoria’s Secret (NYSE:VSCO)
Spun off from L Brands in 2020, Victoria’s Secret (NYSE:VSCO) is an intimates and cosmetics retailer that sells its own brands of lingerie, underwear and body fragrances.
Victoria’s Secret reported revenue of $1.36 billion, down 3.4 percent year over year and in line with analysts’ expectations. Overall, it was a weaker quarter for the company, which missed analysts’ estimates for gross margin and profit.
The stock has risen 6.9% since the report and is currently trading at $24.17.
Read our full, actionable Victoria’s Secret report for free here.
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