Q1 Earnings Outperformers: Gap (NYSE:GAP) And The Rest Of The Apparel Retailer Stocks

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at apparel retailer stocks, starting with Gap (NYSE:GAP).

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.

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.

Gap (NYSE:GAP)

Operating under the Gap, Old Navy, Banana Republic, and Athleta brands, Gap (NYSE:GAP) is an apparel and accessories retailer selling casual clothing to men, women, and children.

Gap reported revenues of $3.46 billion, up 2.2% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and a decent beat of analysts’ EPS estimates.

"Gap Inc. delivered strong first quarter results, exceeding financial expectations and gaining market share for the 9th consecutive quarter," said President and Chief Executive Officer, Richard Dickson.

Unsurprisingly, the stock is down 28.8% since reporting and currently trades at $19.89.

Is now the time to buy Gap? 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 an impressive beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Urban Outfitters achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 27.6% since reporting. It currently trades at $76.06.

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.

Interestingly, the stock is up 3.2% since the results and currently trades at $11.54.

Read our full analysis of American Eagle’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 $1.35 billion, flat year on year. This print surpassed analysts’ expectations by 0.8%. Zooming out, it was a satisfactory quarter as it also logged a solid beat of analysts’ EPS estimates but a significant miss of analysts’ gross margin estimates.

Victoria's Secret scored the highest full-year guidance raise among its peers. The stock is down 10.2% since reporting and currently trades at $19.94.

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

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 $266 million, down 4.9% year on year. This number came in 1.6% below analysts' expectations. Overall, it was a slower quarter as it also produced a significant miss of analysts’ gross margin estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.

Torrid had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 47.5% since reporting and currently trades at $2.62.

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

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.