Apparel Retailer Stocks Q1 Highlights: Lululemon (NASDAQ:LULU)

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Lululemon (NASDAQ:LULU) and the rest of the apparel retailer stocks fared in Q1.

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 mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.8% 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 8.2% 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 $2.37 billion, up 7.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with EPS guidance for next quarter missing analysts’ expectations.

Unsurprisingly, the stock is down 30.3% since reporting and currently trades at $229.97.

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

Best Q1: 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 $1.33 billion, up 10.7% year on year, outperforming analysts’ expectations by 2.5%. The business had a stunning quarter with a solid beat of analysts’ EPS and EBITDA estimates.

Urban Outfitters pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.9% since reporting. It currently trades at $72.67.

Is now the time to buy Urban Outfitters? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: 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 $1.09 billion, down 4.7% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

As expected, the stock is down 11.2% since the results and currently trades at $9.93.

Read our full analysis of American Eagle’s results here.

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 $184.3 million, up 3.9% year on year. This number surpassed analysts’ expectations by 1.2%. More broadly, it was a slower quarter as it logged a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations significantly.

The stock is up 2.7% since reporting and currently trades at $13.21.

Read our full, actionable report on Zumiez here, it’s free.

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 $1.35 billion, flat year on year. This print topped analysts’ expectations by 0.8%. Taking a step back, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ gross margin estimates.

Victoria's Secret delivered the highest full-year guidance raise among its peers. The stock is down 14.1% since reporting and currently trades at $19.08.

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

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.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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