Modern Retail Quarterly Earnings Recap: Execs from Target, Five Below, E.l.f. and more define how they’re delivering ‘value’ to customers

Customers are still willing to spend when they come across the right item that checks all of their boxes for the right price. “Value” was a buzzword that came up repeatedly during earnings calls. In turn, many retail executives spent their earnings calls discussing how they were maniacally focused on ensuring their teams were delivering an on-trend assortment to customers at the right price, while also ramping up efforts to diversify sourcing away from China. 

To help you keep track of the latest in this ever-fluctuating industry, Modern Retail has compiled a quarterly earnings recap. The following includes highlights from retail earnings calls held from April 1 to July 1, with insights broken up by industry. During this period, most companies held their Q1 earnings calls, unless they follow a different fiscal year calendar. 

Apparel

• Even though tariffs and dampened consumer sentiment pose a big threat to a discretionary category like apparel, brands that have successfully evolved their product assortment to fit with their consumers’ lifestyle continued to see sales gains. Now, the focus is on figuring out where to apply price increases due to tariffs and doing so very selectively. 
• Lululemon reported sales growth of 7%. And, sales grew 2% in the U.S., a turnaround from the last few quarters. CEO Calvin McDonald said that though “consumers remain cautious,” the company is finding success with a mix of “high-performance, high-style” products. It is taking the performance fabrics it is known for, and applying them to products that lean more on the “leisure” side of athleisure, like its new Daydrift trousers. 
• Urban Outfitters Inc. reported that sales grew 10.7% and hit a record $1.33 billion. Sales at Anthropologie were up 7%, marking four straight years of quarterly comp sales growth. Anthropologie recently launched an in-house resort-wear label that its parent company says has “exceeded expectations.” The company’s rental brand, Nuuly, is still on a tear, reporting 60% revenue growth during the quarter. 
• American Eagle Outfitters, meanwhile, saw sales decline 5% as CEO Jay Schottenstein admitted, “We did not execute to our potential,” and had some product misses in spring and summer. At Aerie, for example, the brand invested too much in lace shorts and tops, which “simply did not resonate with our customer,” especially amid a cooler start to spring. AEO hopes to turn things around with the all-important back-to-school season. 

Beauty 

• It could be boom time for beauty as “many consumers indicate that they are leaning into beauty as a comfort and escape from the stress of macro uncertainty,” Ulta CEO Kecia Steelman said. However, what consumers want to treat themselves to — and what they consider to be a good deal — continues to shift. Beauty companies this quarter were focused on making sure they have the right, trendy, buzzy products on hand. 
• Ulta’s “Ulta Beauty Unleashed” turnaround plans show early signs of promise. Ulta had a better-than-expected first quarter, with sales up 4.5%. The company added 19 new brands to stores during the quarter, including Tatcha, Milk Makeup, Ilia and Saltair, which “all performed well and drove strong guest engagement.” Fragrance was its top-performing category. 
• E.l.f. Beauty’s earnings were dominated by the news that it would buy Hailey Bieber’s Rhode in a deal worth $1 billion. But E.l.f. itself is still on a tear, as the company’s net sales grew 28% year-over-year. However, the company is taking a $1 price increase on its assortment globally starting August 1, as E.l.f said 75% of its production comes from China. It’s looking to new launches like its Glow Reviver Melting balms to keep momentum strong. 

Big-box

• Walmart continues to show signs that it is gaining share amid economic uncertainty, but it is not immune in the short term from the impact of tariffs. Net sales were up 2.5% year-over-year. And, Walmart’s e-commerce business turned profitable for the first time this quarter, which the company attributed to “more people coming to Walmart now to take advantage of our e-commerce offerings.” 
• Target, meanwhile, still has its work cut out for itself in proving to investors that it has a solid turnaround plan. Net sales were down 2.8% year-over-year during the first quarter, while comp sales were down 3.8%. To appeal to value-conscious shoppers, Target is introducing 10,000 new items this summer, including more food, beverage and beauty products in Bullseye Playground, its section for $1, $3 and $5 items. 

Discount stores 

• Discount stores are poised to benefit from high-income consumers trading down. In turn, many of the strong-performing discount stores are spending this year by investing more in their in-store experience, remodeling stores and ensuring they have the right, on-trend products to retain these new customers. 
• Dollar General “saw the highest percentage of trade-in customers we’ve had in the last four years,” according to CEO Todd Vasos, as sales were up 5.3%. Dollar General plans to renovate approximately 4,250 stores to varying degrees this year and has also spent more on employee compensation to reduce turnover. 
• Discount chain Five Below is on a tear, with sales up 19.5% during its fiscal first quarter. CEO Winnie Park said what drove these results was a “maniacal focus on delivering a great customer experience grounded in fun and extreme value,” as the company focused on sourcing trendy products in hot categories like beauty, items for seasonal occasions like Easter, and collectibles tied to cultural moments like the “Minecraft” movie. 

Food

• At food and beverage giants, the focus continues to be on how CPG giants are tweaking their product portfolios and marketing to address the value-oriented consumer and respond to increasing demand for better-for-you products.
• General Mills’s sales were down 2% during its fiscal fourth quarter. Its big priority this year is to return its North American retail business to volume growth. To do so, it is emphasizing newness, with a plan to drive 25% of its sales from new products and to introduce more new pack sizes. 
• Campbell’s, meanwhile, is benefiting as more consumers cook at home to save money. Its net sales were up 4%, driven by growth in its meals and beverages category, offsetting category softness in snacks. “While value is important, consumers favor better-for-you segments and are willing to selectively splurge when the benefits are clearly worth it,” CEO Mick Beekhuizen said.

Footwear

• Deckers, owner of Ugg, Hoka and Teva, reported that revenue increased 6.5% in its fiscal fourth quarter primarily driven by strength in Ugg and Hoka. But, Hoka’s sales are slowing: Hoka’s sales grew 10% during the quarter, compared to 34% growth during the same period last year. In turn, the company is focused on increasing Hoka’s footprint in international markets like China, increasing its wholesale presence and going after more consumers who are interested in Hoka for a variety of use cases. 
• On, meanwhile continues to grow at a fast clip, with sales up 43% year-over-year during its fiscal first quarter. According to On co-founder Caspar Coppetti, the goal is to position On not just as a footwear brand for runners, but also as “the most premium global sportswear brand” To that end, the company has sought to build awareness through a new campaign with Zendaya, and increasingly promote its apparel and accessories in campaigns. 

Furniture

• Furniture is an industry that threatens to be hit heavily by tariffs as well as continued struggles in the housing market, but the industry’s biggest players are focused on making opportunistic bets to grab more market share. 
• Wayfair’s sales were essentially flat during its first fiscal quarter; revenue in the U.S. was up 1.6%, but international revenue was down 10.9% year-over-year, largely due to the closure of its German business. Wayfair CEO Niraj Shah said the company saw little evidence that consumers were “pulling forward” purchases due to tariffs, with the exception of appliances. 
• RH’s revenue was up 12%. CEO Gary Friedman said, “The substantial investments to elevate and expand our product and platform have resulted in significant share gains.” RH rolled out several new sourcebooks this quarter focused on categories like outdoors which Friedman said have seen a positive consumer response. RH also upped its membership discount to 35% for a limited time to grab more market share.  

Home and beauty appliances 

• As with other categories, brands in home appliances — which sell everything from espresso makers to blenders to hair dryers — are trying to figure out where customers will splurge right now. 
• SharkNinja, which sells everything from curling irons to vacuums, saw sales increase 15% year-over-year, driven by buzzy new products like a frozen slushie maker and an LED face mask. What’s more, SharkNinja is selectively testing price increases. It recently raised the price on its new luxe espresso maker from $499 to $549 and saw no decrease in demand. 
• Helen of Troy, owner of Oxo, Honeywell, Revlon and more brands, saw a slight sales decrease of 0.7% during its most recent quarter. Some of its categories, like food storage containers and insulated beverages, are continuing to normalize after seeing explosive growth during the Covid pandemic. Still, “many of our leading brands are well-positioned to offer consumers benefits they seek at a great value,” CEO Noel Geoffroy said. 

Home Improvement 

• Home Depot’s sales were up 9.7% year-over-year, as inflation from core commodity categories drove up its average ticket. Comp sales, however, were down 0.3%, The company said it saw positive sales trends in building materials, lumber and hardware, but it saw “softer engagement in larger discretionary products where customers typically used financing to fund the project such as kitchen and bath remodels.” 
• Lowe’s revenue dropped 2.3% during the first quarter, while comp sales were down 1.7%, as the company was hurt by “fewer smaller ticket seasonal transactions and ongoing DIY pressures,” CFO Brandon Fink said. Its average ticket was up 2%, however, driven by strength in pros and appliances. Lowe’s is now focused on driving more sales during its key spring season, with promotions like Mulch Madness. 

Luxury 

• At Tapestry, owner of Kate Spade, Coach, and Stuart Weitzman, sales were up 7% versus the prior year. But the big story continues to be how the luxury brand owner is winning over new generations: It acquired over 1.2 million new customers in North America during the quarter, two-thirds of whom were Gen Z or millennials. The Coach brand, in particular, saw “a meaningful increase in year one retention rates” among Gen-Z shoppers, according to CEO Joanne Crevoiserat.
• Ralph Lauren’s sales increased 8% during its fiscal fourth quarter earnings, and executives spent the earnings call discussing how “timeless” the brand is, which Ralph Lauren believes should help it withstand economic volatility. Ralph Lauren also added a record 5.9 million new customers to its DTC business over the past year — many are “younger, female and less price-sensitive cohorts,” according to CEO Patrice Louvet.