Q1 Consumer Discretionary – Apparel and Accessories Earnings: Movado (NYSE:MOV) Earns Top Marks
As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the consumer discretionary – apparel and accessories industry, including Movado (NYSE:MOV) and its peers.
The Consumer Discretionary sector, by definition, is made up of companies selling non-essential goods and services. When economic conditions deteriorate or tastes shift, consumers can easily cut back or eliminate these purchases. For long-term investors with five-year holding periods, this creates a structural challenge: the sector is inherently hit-driven, with low switching costs and fickle customers. As a result, only a handful of companies can reliably grow demand and compound earnings over long periods, which is why our bar is high and High Quality ratings are rare.Apparel and accessories companies design, brand, and distribute clothing, handbags, jewelry, and related lifestyle products, often spanning multiple price tiers. Tailwinds include premiumization trends (consumers trading up for perceived quality), international expansion into emerging markets, and growing digital commerce penetration. However, these businesses face headwinds from highly cyclical demand, intense promotional environments, and counterfeit competition undermining brand equity. Tariff volatility and sourcing concentration in a handful of countries add risk. Additionally, rapidly changing fashion cycles and the rise of ultra-fast-fashion digital competitors compress product life cycles and make demand forecasting exceptionally difficult.
The 15 consumer discretionary – apparel and accessories stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 7.9% on average since the latest earnings results.
Best Q1: Movado (NYSE:MOV)
With its watches displayed in 20 museums around the world, Movado (NYSE:MOV) is a watchmaking company with a portfolio of watch brands and accessories.
Movado reported revenues of $142.4 million, up 8.1% year on year. This print exceeded analysts’ expectations by 5.4%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS and EBITDA estimates.
Efraim Grinberg, Chairman and Chief Executive Officer, stated: “We are pleased with our start to the year, accelerating the momentum from year-end and delivering a strong first quarter. We increased net sales by 8%, expanded gross margin by 320 basis points, and delivered earnings per share of $0.30 compared to $0.06 in the prior year — while also making meaningful progress on our strategic initiatives.”
Interestingly, the stock is up 27% since reporting and currently trades at $37.88.
Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs (NYSE:FIGS) is a healthcare apparel company known for its stylish approach to medical attire and uniforms.
Figs reported revenues of $159.9 million, up 28% year on year, outperforming analysts’ expectations by 4.7%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.
Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 34.8% since reporting. It currently trades at $10.02.
Founded in 1996 by a former University of Maryland football player, Under Armour (NYSE:UAA) is an apparel brand specializing in sportswear designed to improve athletic performance.
Under Armour reported revenues of $1.17 billion, flat year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 8% since the results and currently trades at $6.54.
Founded to revolutionize thrifting, ThredUp (NASDAQ:TDUP) is a leading online fashion resale marketplace offering a wide selection of gently-used clothing and accessories.
ThredUp reported revenues of $81.67 million, up 14.6% year on year. This print surpassed analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 58.2% since reporting and currently trades at $6.92.
Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Tapestry reported revenues of $1.92 billion, up 21.2% year on year. This number topped analysts’ expectations by 7.6%. It was a stunning quarter as it also produced an impressive beat of analysts’ adjusted operating income and EPS estimates.
Tapestry achieved the biggest analyst estimate beat and highest full-year guidance raise among its peers. The stock is down 1.4% since reporting and currently trades at $146.81.
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