Wrapping up Q2 earnings, we look at the numbers and key takeaways for the apparel retailer stocks, including Lululemon (NASDAQ: LULU) 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 strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.

While some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 5% since the latest earnings results.

Lululemon (NASDAQ: LULU)

Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.

Lululemon reported revenues of $2.53 billion, up 6.5% year on year. This print fell short of analysts’ expectations by 0.5%. Overall, it was a slower quarter for the company with full-year EPS guidance missing analysts’ expectations significantly and EPS guidance for next quarter missing analysts’ expectations significantly.

Lululemon delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 19.7% since reporting and currently trades at $165.46.

Is now the time to buy Lululemon? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q2: American Eagle (NYSE: AEO)

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

American Eagle reported revenues of $1.28 billion, flat year on year, outperforming analysts’ expectations by 4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ gross margin estimates.

The market seems happy with the results as the stock is up 21% since reporting. It currently trades at $16.51.

Is now the time to buy American Eagle? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $262.8 million, down 7.7% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and revenue guidance for next quarter missing analysts’ expectations significantly.

Torrid delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 49% since the results and currently trades at $1.22.

Read our full analysis of Torrid’s results here.

Victoria's Secret (NYSE: VSCO)

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 $1.46 billion, up 3% year on year. This print surpassed analysts’ expectations by 4%. Overall, it was a very strong quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Victoria's Secret pulled off the biggest analyst estimates beat among its peers. The stock is up 57.3% since reporting and currently trades at $35.80.

Read our full, actionable report on Victoria's Secret here, it’s free for active Edge members.

Zumiez (NASDAQ: ZUMZ)

With store associates called “Zumiez Stash Members”, Zumiez (NASDAQ: ZUMZ) is a specialty retailer of street and skate apparel, footwear, and accessories.

Zumiez reported revenues of $214.3 million, up 1.9% year on year. This result beat analysts’ expectations by 1.4%. It was a stunning quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The stock is up 17.3% since reporting and currently trades at $21.64.

Read our full, actionable report on Zumiez here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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