Unpacking Q3 Earnings: Children's Place (NASDAQ:PLCE) In The Context Of Other Apparel Retailer Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at apparel retailer stocks, starting with Children's Place (NASDAQ:PLCE).
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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 1.5% above.
Stocks—especially those trading at higher multiples—had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some apparel retailer stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.8% since the latest earnings results.
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. This print exceeded analysts’ expectations by 3.4%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ gross margin estimates and underwhelming earnings guidance for the next quarter.
Jane Elfers, President and Chief Executive Officer said, “Our Q3 results exceeded our expectations on the top line. The top line beat was driven by another quarter of industry-leading digital performance, fueled by a double digit increase in ecommerce traffic, with strong Back-to-School results in August and the success of our seasonal categories in September and October.”
Children's Place Total Revenue
Children's Place scored the highest full-year guidance raise of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 35.3% since reporting and currently trades at $26.12.
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 $177.4 million, down 3% year on year, outperforming analysts’ expectations by 3.4%. It was a stunning quarter for the company with optimistic earnings guidance for the next quarter and an impressive beat of analysts’ gross margin estimates.
Zumiez Total Revenue
The market seems happy with the results as the stock is up 35.3% since reporting. It currently trades at $26.12.
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 $115.9 million, down 6.3% year on year, in line with analysts’ expectations. It was a slower quarter for the company with underwhelming earnings guidance for the next quarter and a miss of analysts’ earnings estimates.
Tilly's had the slowest revenue growth in the group. As expected, the stock is down 19% since the results and currently trades at $4.70.
Originally serving yogis and hockey players, Lululemon (NASDAQ:LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Lululemon reported revenues of $2.21 billion, up 10.4% year on year, in line with analysts’ expectations. Zooming out, it was a mixed quarter for the company with strong earnings guidance for the full year but full-year revenue guidance missing analysts’ expectations.
Lululemon had the weakest full-year guidance update among its peers. The stock is down 21.5% since reporting and currently trades at $242.13.
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 $1.36 billion, down 3.4% year on year, in line with analysts’ expectations. More broadly, it was a slower quarter for the company with a miss of analysts’ gross margin and earnings estimates.
The stock is up 6.9% since reporting and currently trades at $24.17.
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