Spotting Winners: Abercrombie and Fitch (NYSE:ANF) And Apparel Retailer Stocks In Q2

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 Q2. Today, we are looking at apparel retailer stocks, starting with Abercrombie and Fitch (NYSE:ANF).

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 0.5% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Abercrombie and Fitch (NYSE:ANF)

Founded as an outdoor and sporting brand, Abercrombie & Fitch (NYSE:ANF) evolved to become a specialty retailer that sells its own brand of fashionable clothing to young adults.

Abercrombie and Fitch reported revenues of $1.21 billion, up 6.6% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but EPS guidance for next quarter missing analysts’ expectations.

Fran Horowitz, Chief Executive Officer, said, “We delivered record second quarter net sales, exceeding our expectations, with 7% growth to last year. We continued to drive meaningful engagement with our teen customer in Hollister brands, growing 19% on strong summer and back-to-school demand. While we made progress on key inventory initiatives by leveraging promotions and testing new product concepts, Abercrombie brands net sales were down 5%, lapping 26% growth in the prior year. On the bottom line, we exceeded our second quarter profitability expectations, while also returning $50 million to shareholders through our sixth consecutive quarter of share repurchases."

Unsurprisingly, the stock is down 9.2% since reporting and currently trades at $87.86.

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

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 an impressive beat of analysts’ gross margin estimates.

The market seems happy with the results as the stock is up 32% since reporting. It currently trades at $18.01.

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

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 softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.

Torrid delivered the slowest revenue growth in the group. As expected, the stock is down 24.3% since the results and currently trades at $1.81.

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 result surpassed analysts’ expectations by 1.9%. It was a strong quarter as it also produced a beat of analysts’ EPS and gross margin estimates.

Urban Outfitters scored the fastest revenue growth among its peers. The stock is down 7.9% since reporting and currently trades at $72.

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

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 number topped analysts’ expectations by 1.4%. Overall, it was an exceptional quarter as it also put up EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

The stock is up 9.3% since reporting and currently trades at $20.16.

Read our full, actionable report on Zumiez 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.

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