Apparel Retailer Stocks Q3 Recap: Benchmarking Victoria's Secret (NYSE:VSCO)

Let's dig into the relative performance of Victoria's Secret (NYSE:VSCO) and its peers as we unravel the now-completed Q3 apparel retailer earnings season.

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. Inflation (despite slowing) has investors prioritizing near-term cash flows, but apparel retailer stocks held their ground better than others, with the share prices up 11% 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 $1.27 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.

Chief Executive Officer Martin Waters commented on the third quarter, “We delivered third quarter results within our guidance range, and we are encouraged by the improving sales trend as we transition into the all-important holiday season. Our sales trend in North America continued to improve as planned each month throughout the third quarter with October being our strongest month. Our teams have been resiliently focused on what is within our control and working tirelessly on multiple growth initiatives designed to create momentum. We are delivering key initiatives such as our new multi-tender loyalty program, new customer experience enhancements in our digital business, product improvements and launches to enhance the Victoria’s Secret brand and accelerate our beauty business, a reimagined merchandise strategy for our PINK brand, and the return of our iconic fashion show with the Victoria’s Secret World Tour ’23.”

The stock is up 4.4% since the results and currently trades at $24.61.

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

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, outperforming analyst expectations by 4.4%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.

The stock is up 42.4% since the results and currently trades at $19.45.

Is now the time to buy Gap? Access our full analysis of the earnings results here, it's free.

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, exceeding 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 in the group. The stock is down 13.5% since the results and currently trades at $24.75.

Read our full analysis of Children's Place's results here.

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 $216.3 million, down 8.9% year on year, surpassing analyst expectations by 1.3%. It was a strong quarter for the company, with an impressive beat of analysts' earnings estimates and revenue guidance for next quarter exceeding analysts' expectations.

Zumiez had the slowest revenue growth among its peers. The stock is down 4.8% since the results and currently trades at $18.02.

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

Tilly's (NYSE:TLYS)

With an emphasis on skate and surf culture, Tilly’s (NYSE:TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults.

Tilly's reported revenues of $166.5 million, down 6.4% year on year, falling short of analyst expectations by 1%. It was a decent quarter for the company, with an impressive beat of analysts' earnings estimates.

Tilly's had the weakest performance against analyst estimates among its peers. The stock is down 8.5% since the results and currently trades at $7.56.

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

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The author has no position in any of the stocks mentioned