As we near the end of the frenetic earnings season, let’s take a look back at some of the most exciting (and not-so-exciting) results from the second quarter. Today, we’ll be focusing on apparel, accessories, and luxury goods stocks, including Movado (NYSE:MOV).
In apparel and accessories, not only are styles changing more frequently today than in past decades, as trends are transmitted through social media and the internet, but consumers are also changing the way they purchase products, becoming omnichannel. and e-commerce experience. While some apparel, accessories, and luxury goods companies are making a concerted effort to adapt, slow-moving companies may fall behind.
The 17 apparel, accessories, and luxury goods stocks we track saw slower second-quarter results. Groupwide revenue was 1.4% below analysts’ consensus estimates, and the company’s earnings outlook for the next quarter was 12.6% below.
In September 2024, the Federal Reserve lowered its policy interest rate by 50bps (0.5%) for the first time in about four years. This marks the end of the sharpest campaign to defeat inflation since the 1980s. Recent CPI (inflation) statistics are supportive, but employment measures are a cause for concern. Markets will be waiting to see whether the timing of this rate cut (and potentially 2024 and 2025) is the ideal time to support the economy, or whether it’s a bit too late for already too cool macros. Probably.
Apparel, accessories, and luxury goods stocks performed well on the news, with stocks up an average of 3.6% since the most recent earnings release.
Q2 Best: Movado (NYSE:MOV)
Movado (NYSE:MOV), whose watches are displayed in 20 museums around the world, is a watch manufacturing company with a portfolio of watch brands and accessories.
Movado reported revenue of $159.3 million, flat year over year. The results beat analysts’ expectations by 5.9%. Despite the sales growth, it was still a weak quarter for the company, as its full-year revenue outlook was lower than analysts expected, and analysts’ profit estimates were also lower.
Ephraim Greenberg, Chairman and CEO, said, “Sales trends improved from the first quarter due to increased marketing investment and efforts to improve retail performance, but the impact of tough consumer spending led to a decline in sales trends in the second quarter. “Sales and profits were lower than expected.” The environment is worsening further due to increased expenses to support future growth.
Movado beat the largest analyst estimate of the entire group. Despite having a great quarter compared to the same quarter, the market appears to be dissatisfied with the results. The stock has fallen 27.9% since the report and is currently trading at $2.70.
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Read the full Movado report for free here.
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 a personalized clothing selection for its customers.
Stitch Fix reported revenue of $319.6 million, down 12.4% year-over-year, in line with analyst expectations. Although the business performed better than its peers, it unfortunately had a weak quarter as analysts’ operating margin expectations were missed and the next quarter’s revenue outlook was also lower than analysts expected.
Although it was a strong quarter compared to the same quarter, the market appears to be dissatisfied with the results, as the stock is down 27.9% since the announcement. Current price is $2.70.
Is now the time to buy Stitch Fix? A complete analysis of the financial results is available for free here.
Weakest in Q2: ThredUp (NASDAQ:TDUP)
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is the leading online fashion resale marketplace offering a wide selection of gently used clothing and accessories.
ThredUp reported that sales were $79.76 million, down 3.5% year over year, and 3.3% below analysts’ expectations. It was a disappointing quarter as the company announced earnings guidance for next quarter that was below analysts’ expectations and also below analysts’ profit estimates.
As expected, the stock has fallen 52.7% since earnings and is currently trading at $0.82.
Click here for a complete analysis of ThredUp’s results.
Ralph Lauren (NYSE:RL)
Originally founded as a tie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic, sophisticated style.
Ralph Lauren reported sales of $1.51 billion, up 1% year over year. The result was 1.5% higher than analysts expected. Overall, it was a strong quarter as the company consistently beat analysts’ constant currency sales estimates and also significantly beat analysts’ revenue estimates.
The stock has increased 17.9% since the report and is currently trading at $194.57.
Read the full practical report on Ralph Lauren for free here.
Levi’s (NYSE:LEVI)
Known for inventing the first blue jeans in 1873, Levi’s (NYSE:LEVI) is a clothing company known for its iconic denim products and classic American style.
Levi’s reported sales of $1.52 billion, flat year over year. This figure was 2.4% lower than analysts expected. In addition, analysts’ sales forecasts without currency fluctuations were below expectations, and full-year profit forecasts were also significantly below expectations, resulting in a weak quarter.
The stock has fallen 8.5% since the report and is currently trading at $19.26.
Read the full practical report on Levi’s for free here.
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