Specialty retailers have begun reporting their holiday sales results, adding detail to the season's performance. Wall Street views the outcomes as mixed compared to its expectations.
Lululemon Athletica Inc. stated its fourth-quarter sales would be toward the high end of its previous guidance, which called for $3.5 billion to $3.59 billion. This represents growth of 2 percent to 4 percent, excluding an extra week in 2024. According to Yahoo Finance, this leaves some upside to the $3.57 billion analysts had projected.
Tom Nikic, an analyst at Needham, noted that Lululemon has typically raised its outlook range for revenue, EPS, gross margin, and SG&A ahead of the ICR Conference. "We believe the business continues to work through several challenges, both internal and external, and we're awaiting greater clarity around the turnaround," Nikic said. Investors responded positively, with Lululemon shares rising 2.5 percent to $209.04 at Monday's close.
Urban Outfitters Inc. reported that its brands increased total sales for November and December by 9 percent. This included a 9 percent comparable increase at its Urban Outfitters business, while Free People was up 5 percent and Anthropologie was ahead 3 percent. The Nuuly rental concept drove subscription sales up 43 percent.
Francis Conforti, copresident and chief operating officer, speaking at the ICR conference, said, "We tend to serve that sort of middle-income-and-above customer. And for us right now, the customer feels good. Overall we feel like the consumer's in a good place. Unemployment is low. Job market's good. Wages are growing. Inflation is much lower than where it has been. Honestly, the stock market's up, which tends to put our consumer in a good mood as well." However, the holiday pace fell short of the 9.4 percent growth analysts expected for the quarter. Urban Outfitters shares dropped 12.31 percent to $71.52 at Monday's close.
American Eagle Outfitters Inc. said that through Jan. 3, fourth-quarter comparable sales were up in the low single digits at its namesake chain and ahead in the low 20s at Aerie. The retailer raised its operating income forecast for the quarter to a range of $167 million to $170 million, up from $155 million to $160 million previously projected. "The increase largely reflects solid margin performance and anticipates consolidated comparable sales up in the range of 8 percent to 9 percent," the company stated.
Jay Schottenstein, executive chairman and CEO of AEO, said, "Our customers embraced new product collections and responded to our latest marketing initiatives, with strength continuing in the post-holiday period." American Eagle's stock declined 3.54 percent to $25.87 at Monday's close.
Retailers and investors are reviewing numbers and checking the outlook at the ICR Conference in Orlando and the National Retail Federation's Big Show in New York this week.