Apparel Retailer Stocks Q2 Teardown: Victoria's Secret (NYSE:VSCO) Vs The Rest

Looking back on apparel retailer stocks' Q2 earnings, we examine this quarter's best and worst performers, including Victoria's Secret (NYSE:VSCO) 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 10 apparel retailer stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 1.9% while next quarter's revenue guidance was 1.53% below consensus. Growth stocks have been under pressure as inflation makes their long-dated profits less valuable, but apparel retailer stocks held their ground better than others, with the share prices up 13.2% on average since the previous earnings results.

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 $1.43 billion, down 6.19% year on year, falling short of analyst expectations by 0.76%. It was a weak quarter for the company, with a miss of analysts' gross margin estimates and a miss of analysts' earnings estimates.

Chief Executive Officer Martin Waters commented, “We delivered second quarter sales, adjusted operating income and adjusted diluted earnings per share within our guidance range while the macro environment continues to put pressure on our customer base and our core intimates categories. As anticipated, and what was a continuation of first quarter trends, sales performance in the second quarter was particularly challenging in the overall stores and digital intimates market in North America which impacted both our Victoria’s Secret and PINK businesses in the quarter. In contrast, our international business experienced sales growth in excess of 25% compared to last year and strong profit flow thru, and our recently acquired Adore Me brand also grew sales during the quarter highlighting the strength of the business model and unique digital strategies. Our teams were resiliently focused on what was within our control, managing selling margins, diligently controlling costs, and delivering inventory levels at our Victoria’s Secret and PINK businesses down low-double digits compared to last year.”

The stock is down 3.96% since the results and currently trades at $17.24.

Read our full report on Victoria's Secret here, it's free.

Best Q2: 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 $935.3 million, up 16.2% year on year, outperforming analyst expectations by 10.8%. It was a strong quarter for the company, with an impressive beat of analysts' earnings estimates and an impressive beat of analysts' revenue estimates.

Abercrombie and Fitch pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is up 53.9% since the results and currently trades at $63.33.

Is now the time to buy Abercrombie and Fitch? 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 $289.1 million, down 15.2% year on year, in line with analyst expectations. It was a weak quarter for the company, with full-year revenue guidance missing analysts' expectations and revenue guidance for next quarter missing analysts' expectations.

Torrid had the slowest revenue growth and weakest full-year guidance update in the group. The stock is up 1.36% since the results and currently trades at $2.24.

Read our full analysis of Torrid's results here.

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 $3.55 billion, down 8.01% year on year, falling short of analyst expectations by 1.19%. It was a mixed quarter for the company, with a miss of analysts' gross margin estimates and a miss of analysts' revenue estimates.

The stock is up 30.1% since the results and currently trades at $12.4.

Read our full, actionable report on Gap here, it's free.

Chico's (NYSE:CHS)

With a style that ranges from casual to dressy, Chico’s FAS (NYSE:CHS) is a women’s apparel and accessories retailer that operates multiple brands.

Chico's reported revenues of $545.1 million, down 2.43% year on year, falling short of analyst expectations by 1.76%. It was a weak quarter for the company, with a miss of analysts' gross margin estimates and a miss of analysts' revenue estimates.

Chico's had the weakest performance against analyst estimates among its peers. The stock is up 46.1% since the results and currently trades at $7.48.

Read our full, actionable report on Chico's here, it's free.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.

The author has no position in any of the stocks mentioned