As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the apparel, accessories and luxury goods industry, including Guess (NYSE:GES) and its peers.
Within apparel and accessories, not only do styles change more frequently today than decades past as fads travel through social media and the internet but consumers are also shifting the way they buy their goods, favoring omnichannel and e-commerce experiences. Some apparel, accessories, and luxury goods companies have made concerted efforts to adapt while those who are slower to move may fall behind.
The 17 apparel, accessories and luxury goods stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was 12.6% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, apparel, accessories and luxury goods stocks have been resilient with share prices up 5.5% on average since the latest earnings results.
Best Q2: Guess (NYSE:GES)
Flexing the iconic upside-down triangle logo with a question mark, Guess (NYSE:GES) is a global fashion brand known for its trendy clothing, accessories, and denim wear.
Guess reported revenues of $732.6 million, up 10.2% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with underwhelming earnings guidance for the full year.
Carlos Alberini, Chief Executive Officer, commented, “During the second quarter we delivered revenue growth of 10%, in line with our expectations. This performance was fueled by the rag & bone acquisition and strong wholesale performance in our Europe and Americas businesses. All our segments, except for Asia, delivered top-line growth. Our bottom-line results reflect our decision to significantly increase our marketing investments compared to last year’s spend to support the international expansion of our brands, including our core Guess brand as well as the new additions to our portfolio – Guess Jeans and rag & bone.”
Guess Total Revenue
Guess achieved the fastest revenue growth of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 38.8% since reporting and currently trades at $2.29.
One of the original subscription box companies, Stitch Fix (NASDAQ:SFIX) is an online personal styling and fashion service that curates personalized clothing selections for customers.
Stitch Fix reported revenues of $319.6 million, down 12.4% year on year, in line with analysts’ expectations. It was a softer quarter with a miss of analysts’ operating margin estimates and revenue guidance for next quarter missing analysts’ expectations.
Stitch Fix Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 38.8% since reporting. It currently trades at $2.29.
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace that offers a wide selection of gently-used clothing and accessories.
ThredUp reported revenues of $79.76 million, down 3.5% year on year, falling short of analysts’ expectations by 3.3%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations and a miss of analysts’ earnings estimates.
As expected, the stock is down 52.5% since the results and currently trades at $0.82.
Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE:FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.
Figs reported revenues of $144.2 million, up 4.4% year on year. This number topped analysts’ expectations by 1.4%. It was a very strong quarter as it also logged an impressive beat of analysts’ earnings estimates.
The stock is up 18% since reporting and currently trades at $6.74.
The parent company of Tommy Bahama, Oxford Industries (NYSE:OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.
Oxford Industries reported revenues of $419.9 million, flat year on year. This result came in 4.2% below analysts' expectations. It was a disappointing quarter as it also logged revenue guidance for next quarter missing analysts’ expectations and underwhelming earnings guidance for the next quarter.
The stock is up 1.3% since reporting and currently trades at $84.67.
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