Upcoming Clothing/Retail Earnings (Week of 5/23/22)

There have been a lot of clothing retailers and those in the clothing business with earnings lately and thought I would jot down some thoughts and notes about them.

American Eagle Outfitters Inc = AEO
Abercrombie & Fitch Co = ANF
Burlington Stores Inc = BURL
Dicks Sporting Goods Inc = DKS
Nordstrom, Inc. = JWN
Ralph Lauren Corp = RL
Ross Stores, Inc. = ROST
Macy’s Inc = M
Target Corporation = TGT
Urban Outfitters, Inc = URBN
Walmart Inc = WMT

This is just a quick screen grab of all those related tickers and their past few earnings.

Looking through several earnings calls, the prevailing thought is the unexpected transportation/freight cost. Along with higher than expected levels of inventory.




Ex. RL


Now on the flip side we have Nordstrom earnings with this.

I could go through tons more but the overall sentiment that I get is that most companies faced much greater freight costs than expected. With the increase in fuel costs, its weighing them down as costs increase not just in transportation but also in cost of materials/production of goods. If we tie this in with expected increasing oil prices, I do not see this getting much better.

Now companies that have reported earnings already have dialed back down guidance in wake of this but there are a few that have not reported yet. Such as M, DKS, BURL and AEO. While RL and JWN both stated that they have “baked in” these elevated costs, I do think that rather their earnings are more indicative of a more resilient customer base.

JWN and RL are targeted imo to customers with more disposable income and more of the upper middle class. They are less affected by current inflationary pressure and as the world continues to open up and more events, parties, etc occur, the demand and growth will be there.

However, those of the lower middle class and low-income are going to be much more significantly hit by these increased costs especially by gas and food. So we see TGT and WMT both stating so in their recent earnings call.

So with that being said, I think that AEO could be in a similar situation to that of ANF and DKS could also be hit.

On the previous DKS earnings call, in regards to their outlook they assumed “some normalization of promotional landscape and higher freight expenses”. One thing to be wary about is that DKS did announce share repurchase and said they would use their cash flow to do more if possible.

Previous AEO earnings call

Not sure how others feel but would love to hear some thoughts and particular those who think differently from me. Always great to hear the other side and see what things were missed.


DKS lowering their outlook has them down 14% in PM.

JWN is only up 4% in PM after initial 20% pop in AH.

ANF, JWN, RL and URBN also all got PT cuts from analysts.

M (Macys), BURL (Burlington), GPS (Gap), AEO (American Eagle Outfitters) remain for earnings this week (in relation to retail/clothing).

1 Like

Thanks for this update reminded me to check out DKS and their earnings actually beat got a good bounce this AM so far.

Wow. Looking across the board, even those that reported decent earnings but cut guidance are all up massive.

1 Like

As a slight recap, it looks all across the board all the non-luxury brand retail clothes stores were hit hard and are cutting back their forecasts.


There are a few more stragglers coming in the next week such as LE (Land’s End), VSCO (Victoria Secret), DBI (Designer Brand), LULU (Lululemon).

So carefully monitoring market conditions, I will probably continue to play what could be a pattern of lower end being hit harder and pulling forecast while the more luxury brands weathering the storm and in some cases upping forecast.

Will dig into previous earnings calls/transcripts for more details but I’m feeling more confident with how things have been trending.

1 Like

@Shadowstars so your thinking would be that LULU would potentially be fine but the other ones listed all seem like they would take a hit? Just looking at the tickers it seems like LULU is the only one that sells more than just clothes (Mirror workout subscription and equipment) and it sells those clothes for a premium.

Thought I’d post a section of the earnings trends summary I posted on the stagflation thread here, since it seemed relevant as @Shadowstars pointed out these clothing companies all struggling with supply chain logistics/inflation:

“The first quarter marked the highest percentage of S&P 500 companies citing “Ukraine” on quarterly earnings calls going back to at least 2010 at 59% (281 out of 476). By comparison, 85% of S&P 500 companies (406 out of 476) have cited “inflation” on earnings calls for Q1, while 74% of S&P 500 companies (352 out of 476) have cited “supply chain” on earnings calls for Q1.”

As a matter of fact, although we saw a bit of a slowdown focused mostly on Europe at the onset of the invasion of Ukraine, we saw a bounce back and we really exited Q1 with momentum. -Autodesk (May 26)

Reading through LULU’s previous earnings call I see a few things.

Overall reading through the previous earnings call, they had great news and obviously the stock price reacted very positively to the news and went up 5%+ even when the overall market had a red day.

At least in regards to their clothing products it does seem like they are much more well insulated to issues between seasonal inventory, pricing, and brand growth.




Earnings Report (Prev Quarters)

Stock Price Leading Into Earnings

The one thing that does have me a bit wary is this though.

15% of their total stores are in China. Now how many of those are affected by the China policy in regards to lockdowns I am not too sure and the fact that online vs retail store sales were nearly equal in terms of revenue does have me thinking that this probably won’t be a big issue.

The larger issue at hand with China is their current state of economy. News seems to be all pointing towards a slowdown in their economy, a slow re-open due to lockdowns and we see analysts downgrading China’s GDP growth from anywhere as high as 5-6% as low as 2.5-3%.


As a quick reminder for me and others who are looking to play the retail earnings.

VSCO (Victoria Secret) AH on Tue
DBI (Designer Brand) PM on Thu
Lands End (LE) PM on Thu
LULU (Lululemon) AH on Thu
DLTH (Duluth Trading) PM on Thu.

VSCO is a tiny bit different imo in terms of typical retail clothing due to their branding, price point, and item type. Nonetheless, I think it would be a good indicator to pay attention to see how more of a “luxury” brand weathers the storm.


“Morgan Stanley downgrades American Eagle, sees big discounts ahead”

Could be a possible puts play today?

1 Like

Played a small position holding through for VSCO and it seems to be doing well initially. Will see if I can listen to their earnings call tomorrow morning.

I think that based on this continued reporting trend, we see that luxury goods/brands are coming out of 2021 pretty strong and have pretty optimistic forecast despite inflationary/supply chain issues. Pairing this up with some optimistic news from China about lockdowns, I think that LULU could have some good earnings also. Not getting into positions yet until the day of earnings due to market volatility but so far no earnings have come out to the contrary.

LULU had some good earnings.

Earnings per share: $1.48 vs. $1.43 expected
Revenue: $1.61 billion vs. $1.53 billion

And upping guidance even with headwinds.

Lululemon sees sales in fiscal 2022 in a range of $7.61 billion to $7.71 billion, up from a prior forecast of $7.49 billion to $7.62 billion.

as ATZ.to shareholder, I hope it also goes up in sympathy

Hello there…nice article in Reuters about Targets excess inventory and how they are pushing it back down towards their vendors

Reviving this and keeping it as a reminder.

Ralph Lauren is having earnings next Tuesday. I will be paying close attention to see how it performs and what the earnings call states for future guidance.

EPS/Rev beat but guidance is down. Going to read through the earnings call transcript later this evening but could provide nice insight to the other upcoming retail/clothing stocks.

1 Like

These are some of the key points I thought from the RL earnings call.

1). RL is well positioned to continue their growth for FY23. They are already factoring in continued supply chain issues/inventory, China lockdown, and currency exchange headwinds. However, even with those considered, they think that they can continue their growth and are seeing increased customer base.

2). The lagging but potentially reviving aspect of Asia markets in regards to their market segment (China/Japan/Korea)

So my thoughts are that much like previous 2 quarters, the more expensive brands are well positioned even with the overall macro trend potentially signaling a downturn. The cheaper brands I do think will be much more price sensitive and will be battling for that market share and will highly depend on how well the company is able to pivot, stock and supply.

So I am thinking of playing all these retail clothing companies in a similar pattern to last earnings.

Look at previous earnings and pay attention to their guidance and see how much they may have factored in increased costs and other headwinds, and pay attention to their inventory levels.

Paying close attention to WMT and TGT earnings and overall market conditions to see which way to potentially play these again.

As a friendly reminder.

BMO = (Before Market Open)
AMC = (After Market Close)

TJX is BMO on Wednesday
Kohl’s is BMO on Thur
Ross is AMC on Thur
Foot Locker is BMO on Fri.

Will add more to this tomorrow with earnings figures once more.

1 Like

Mixed bag. WMT reported “inflation-pinched shoppers were buying less high-margin discretionary merchandise like apparel as they spent more on necessities”.

Also, back to school shopping is ramping up and they are seeing “solid” start.

Prev Earnings.

I grabbed one gamble/lotto to the call side for TJX.

$TJX 67C for Aug 19th with a $1.65 fill. Will note that the spreads are nasty.

Update: Got stopped out at $1.75 for my call. May look to re-enter a bit later.

Likefolio data is slight bullish on this.

1 Like