Firing on All Cylinders: Kontoor Brands (NYSE:KTB) Q2 Earnings Lead the Way
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Kontoor Brands (NYSE:KTB) and the rest of the apparel, accessories and luxury goods stocks fared in Q2.
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 12.3% 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.
In light of this news, apparel, accessories and luxury goods stocks have held steady with share prices up 3.8% on average since the latest earnings results.
Best Q2: Kontoor Brands (NYSE:KTB)
Founded in 2019 after separating from VF Corporation, Kontoor Brands (NYSE:KTB) is a clothing company known for its high-quality denim products.
Kontoor Brands reported revenues of $606.9 million, down 1.5% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ earnings estimates.
“We delivered second quarter results that exceeded our expectations driven by higher revenue, stronger gross margin expansion and cash flow generation,” said Scott Baxter, President, Chief Executive Officer and Chair of Kontoor Brands.
Kontoor Brands pulled off the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 12.4% since reporting and currently trades at $78.95.
Is now the time to buy Kontoor Brands? Access our full analysis of the earnings results here, it’s free.
Stitch Fix (NASDAQ:SFIX)
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. The business performed better than its peers, but it was unfortunately a softer quarter with revenue guidance for next quarter missing analysts’ expectations.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 21.9% since reporting. It currently trades at $2.92.
Is now the time to buy Stitch Fix? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: ThredUp (NASDAQ:TDUP)
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 47.9% since the results and currently trades at $0.90.
Read our full analysis of ThredUp’s results here.
Ralph Lauren (NYSE:RL)
Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style.
Ralph Lauren reported revenues of $1.51 billion, up 1% year on year. This print topped analysts’ expectations by 1.5%. It was a strong quarter as it also put up a solid beat of analysts’ constant currency revenue estimates and a decent beat of analysts’ earnings estimates.
The stock is up 15.4% since reporting and currently trades at $190.56.
Read our full, actionable report on Ralph Lauren here, it’s free.
Movado (NYSE:MOV)
With its watches displayed in 20 museums around the world, Movado (NYSE:MOV) is a watchmaking company with a portfolio of watch brands and accessories.
Movado reported revenues of $159.3 million, flat year on year. This result beat analysts’ expectations by 5.9%. More broadly, it was a strong quarter as it recorded full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
Movado scored the biggest analyst estimates beat among its peers. The stock is down 20% since reporting and currently trades at $18.04.
Read our full, actionable report on Movado here, it’s free.
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