As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the apparel retailer industry, including Tilly's (NYSE: TLYS) 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.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.5% since the latest earnings results.

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 $151.3 million, down 7.1% year on year. This print fell short of analysts’ expectations by 1.8%, but it was still a very strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Tilly's delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 26.5% since reporting and currently trades at $1.50.

Is now the time to buy Tilly's? 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 and gross margin estimates.

The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $15.02.

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.

Torrid delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 37.2% since the results and currently trades at $1.50.

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 $1.50 billion, up 11.3% year on year. This number surpassed analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

Urban Outfitters pulled off the fastest revenue growth among its peers. The stock is down 13.5% since reporting and currently trades at $67.61.

Read our full, actionable report on Urban Outfitters 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 print beat analysts’ expectations by 1.4%. It was a stunning quarter as it also recorded EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The stock is up 10.8% since reporting and currently trades at $20.45.

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

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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