Early holiday shopping season results from various retailers indicate a solid but not exceptional performance.
Lululemon's Performance and Guidance
Lululemon anticipates its holiday quarter revenue and earnings will be at the high end of its previous guidance. The company expects fiscal fourth-quarter revenue close to $3.60 billion and earnings near $4.76 per share. It maintained its previous guidance for gross margin, effective tax rate, and selling, general, and administrative expenses. Finance chief Meghan Frank stated that the company remains focused on executing its action plan for improvement in its U.S. business. Outgoing CEO Calvin McDonald previously noted that wide discounting had driven demand during the Thanksgiving holiday period, with trends slowing afterward. Lululemon has utilized discounts more frequently in recent quarters to manage inventory. During its fiscal third quarter, margins decreased by 2.9 percentage points, primarily due to higher tariffs and increased markdowns.
Abercrombie & Fitch Revises Guidance
Abercrombie & Fitch shares experienced a decline after the retailer reduced the high end of its guidance, despite reporting "record" quarter-to-date sales. The company now expects full-year sales to grow "at least 6%," a reduction from its prior range of 6% to 7%. Its anticipated operating margin is now around 13%, down from a previously expected range of 13% to 13.5%. The company projects earnings per share to be between $10.30 and $10.40, a trim from previous guidance of $10.20 to $10.50. CEO Fran Horowitz stated the company delivered balanced growth across regions, brands, and channels.
Birkenstock and Savers Value Village Results
Birkenstock anticipates an 11% sales growth, reaching €402 million ($470 million) for the quarter ending December 31, which appeared to disappoint investors. Savers Value Village reported 8.4% sales growth during its holiday quarter, with comparable sales up 5.4% (excluding the impact of an extra week). The company reaffirmed its fiscal 2025 adjusted net income and EBITDA outlooks.
American Eagle and Five Below Show Strong Growth
American Eagle reported better-than-expected holiday quarter results, with quarter-to-date comparable sales through January 3 showing high single-digit increases across brands and channels. Comparable sales for its namesake banner grew by a low single-digit percentage, while Aerie's comparable sales increased in the low twenties. American Eagle raised its fourth-quarter operating income guidance to a range of $167 million to $170 million, up from $155 million to $160 million. CEO Jay Schottenstein attributed the record season to brand strength and customer response to new product collections and marketing initiatives.
Five Below's quarter-to-date sales as of January 3 rose 23.2%, with comparable sales climbing 14.5%. CEO Winnie Park stated the performance demonstrated effective strategies focused on customer engagement and value. The company now expects fiscal fourth-quarter sales to be around $1.71 billion, an increase from a previous range of $1.58 billion to $1.61 billion. It approximately doubled its comparable sales outlook to 14%, up from 6% to 8%, and increased its expected earnings per share to between $3.93 and $3.98, from previous guidance of $3.34 to $3.52.
Analyst Expectations
These early results align with analysts' expectations for the holiday shopping season: solid performance overall, with some companies experiencing strong growth, but without widespread significant gains in consumer spending. The National Retail Federation previously projected November and December retail sales to increase between 3.7% and 4.2% compared to 2024. However, some analysts anticipate largely flat volume growth when higher prices from tariffs are factored in.