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.

While some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.5% 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 21.2% since reporting and currently trades at $22.33.

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 $17.50.

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 and revenue guidance for next quarter missing analysts’ expectations.

Torrid delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 47.3% since the results and currently trades at $1.26.

Read our full analysis of Torrid’s results here.

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 $3.73 billion, flat year on year. This print met analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a miss of analysts’ gross margin estimates.

The stock is up 10.7% since reporting and currently trades at $24.26.

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

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 number surpassed analysts’ expectations by 0.7%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but EPS guidance for next quarter missing analysts’ expectations significantly.

The stock is down 27.7% since reporting and currently trades at $69.90.

Read our full, actionable report on Abercrombie and Fitch here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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