Gap (NYSE:GPS) Q3 Earnings: Leading The Apparel Retailer Pack
Wrapping up Q3 earnings, we look at the numbers and key takeaways for the apparel retailer stocks, including Gap (NYSE:GPS) 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 8 apparel retailer stocks we track reported a strong Q3; on average, revenues beat analyst consensus estimates by 3.6% while next quarter's revenue guidance was 3.4% above consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but apparel retailer stocks held their ground better than others, with the share prices up 11% on average since the previous earnings results.
Best Q3: Gap (NYSE:GPS)
Operating under The Gap, Old Navy, Banana Republic, and Athleta brands, The Gap (NYSE:GPS) is an apparel and accessories retailer that sells its own brand of casual clothing to men, women, and children.
Gap reported revenues of $3.77 billion, down 6.7% year on year, topping analyst expectations by 4.4%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.
"Gap Inc. delivered a solid performance in the third quarter. We were pleased to see market share gains as well as improvements in both gross margins and operating margins, demonstrating our ability to drive operating and financial discipline. This rigor has put the company on stronger financial footing and is enabling us to focus on reinvigorating our portfolio of brands, strengthening our operating platform, and reviving our culture for success," said Gap Inc. President and Chief Executive Officer, Richard Dickson.
The stock is up 35.7% since the results and currently trades at $18.53.
Is now the time to buy Gap? Access our full analysis of the earnings results here, it's free.
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 $1.06 billion, up 20% year on year, outperforming analyst expectations by 7.7%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings and revenue estimates.
Abercrombie and Fitch scored the fastest revenue growth among its peers. The stock is up 34.9% since the results and currently trades at $97.5.
Is now the time to buy Abercrombie and Fitch? Access our full analysis of the earnings results here, it's free.
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 $1.27 billion, down 4% year on year, falling short of analyst expectations by 0.4%. It was a weak quarter for the company, with underwhelming earnings guidance for the full year.
The stock is up 3.9% since the results and currently trades at $24.49.
Read our full analysis of Victoria's Secret's results here.
Children's Place (NASDAQ:PLCE)
Offering sizes up to young teens, The Children’s Place (NASDAQ:PLCE) is a specialty retailer that sells its own brands of kid’s apparel and accessories.
Children's Place reported revenues of $480.2 million, down 5.7% year on year, surpassing analyst expectations by 3.4%. It was a slower quarter for the company, with underwhelming earnings guidance for the full year.
Children's Place had the weakest full-year guidance update among its peers. The stock is down 23.4% since the results and currently trades at $21.92.
Read our full, actionable report on Children's Place here, it's free.
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 $1.30 billion, up 4.9% year on year, surpassing analyst expectations by 1.6%. It was a mixed quarter for the company, with revenue exceeding estimates this quarter, driven by better-than-expected same-store store sales growth at both American Eagle and Aerie. On the other hand, its gross margin and operating income guidance for the full year, despite being raised, missed analysts' expectations.
The stock is up 2.5% since the results and currently trades at $20.25.
Read our full, actionable report on American Eagle here, it's free.
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The author has no position in any of the stocks mentioned
