Wrapping up Q2 earnings, we look at the numbers and key takeaways for the apparel retailer stocks, including Zumiez (NASDAQ: ZUMZ) 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 5.9% since the latest earnings results.

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 exceeded analysts’ expectations by 1.4%. Overall, it was a stunning quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Rick Brooks, Chief Executive Officer of Zumiez Inc., stated, “We are encouraged with our second quarter results which exceeded expectations driven by outperformance in North America. Sales trends accelerated throughout the quarter even as we faced more difficult comparisons, underscoring the success of our recent merchandise and customer experience initiatives in what continues to be a challenging operating environment. We are seeing further acceleration third quarter-to-date led by an 11.2% comparable sales gain during back-to-school on top of a double-digit increase in the year ago period. With back-to-school performing well, we are optimistic about our prospects for the holiday season. However, we think it is prudent to balance our current momentum with some near-term conservatism given the uncertainty around tariffs and overall consumer demand.”

Interestingly, the stock is up 18.8% since reporting and currently trades at $21.89.

Is now the time to buy Zumiez? 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 an impressive beat of analysts’ gross margin estimates.

The market seems happy with the results as the stock is up 27.5% since reporting. It currently trades at $17.49.

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 53.5% since the results and currently trades at $1.11.

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 beat analysts’ expectations by 4%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Victoria's Secret achieved the biggest analyst estimates beat among its peers. The stock is up 54.4% since reporting and currently trades at $35.18.

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

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 number missed analysts’ expectations by 1.8%. Zooming out, it was actually a very strong quarter as it produced EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

Tilly's had the weakest performance against analyst estimates among its peers. The stock is down 37.7% since reporting and currently trades at $1.27.

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

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.

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