Early Monday filings from a group of apparel and discount retailers showed the holiday shopping stretch largely met expectations rather than exceeding them. Lululemon said it expects fiscal fourth-quarter revenue near $3.60 billion and earnings around $4.76 per share, marking the top end of its prior guidance. Other brands produced mixed outcomes: Birkenstock and Savers Value Village reported tepid early returns while American Eagle and Five Below raised guidance after stronger-than-expected quarters. Overall, the snapshot points to a solid but unspectacular season across a range of retail formats.
Key takeaways
- Lululemon expects fiscal Q4 revenue close to $3.60 billion and EPS near $4.76, holding margin and SG&A guidance steady.
- Abercrombie cut the high end of its full-year sales growth to at least 6% and trimmed operating margin and EPS guidance; its shares fell about 17% premarket.
- Birkenstock said holiday-quarter sales rose about 11% to €402 million ($470 million); shares were down roughly 3% premarket.
- Savers Value Village reported an 8.4% increase in holiday-quarter sales and comps up 5.4% excluding an extra calendar week, but only reaffirmed outlooks.
- American Eagle posted quarter-to-date comps through Jan. 3 in the high single digits and raised Q4 operating income guidance to $167m–$170m.
- Five Below reported quarter-to-date sales up 23.2% and comps up 14.5%, lifting Q4 sales guidance to about $1.71 billion and EPS expectations to roughly $3.93–$3.98.
- The National Retail Federation had forecasted November–December retail sales growth of 3.7%–4.2% year over year, a benchmark many analysts used to judge results.
Background
The December-to-January shopping period is the retail industry’s largest revenue window and a key barometer for consumer spending health. After several years of pandemic-era distortions, inflation, and supply-chain adjustments, 2025 holiday results were widely expected to show steady spending but muted volume growth once price effects were stripped out. Retailers entered the season with varying inventories and promotional strategies: premium brands had historically been conservative on discounts, while value and discount chains leaned into price-driven traffic.
Market participants also faced company-specific headwinds. Lululemon is navigating executive turnover and a looming proxy contest with its founder while managing heavier markdowns used to clear older inventory. Abercrombie, which reported strong quarter-to-date sales, nonetheless reduced the top end of its growth and margin outlook, raising questions about cost pressures and mix. Smaller public chains such as Birkenstock and Savers provided early reads that helped investors reprice expectations ahead of broader quarterly releases.
Main event
Lululemon issued a brief release saying it expects fiscal fourth-quarter revenue near $3.60 billion and EPS near $4.76, both at the high end of December guidance; it left gross margin, effective tax rate, and SG&A assumptions unchanged. The company emphasized execution of a U.S. action plan as it prepares for a new CEO and a proxy contest tied to its founder, while noting that heavy discounting during Thanksgiving had altered early demand patterns.
Abercrombie & Fitch reported record quarter-to-date sales through December but trimmed the high end of its full-year sales growth target to at least 6%, narrowing its operating margin outlook to about 13% and slightly altering EPS guidance to $10.30–$10.40. The stock reacted negatively in premarket trading, reflecting investor focus on margin compression despite top-line strength.
Birkenstock said sales for the quarter ended Dec. 31 rose about 11% to €402 million ($470 million). Investors appeared underwhelmed and shares moved down modestly. Savers Value Village posted an 8.4% increase in holiday-quarter sales and comparable-store sales up 5.4% excluding an extra week, but the company simply reaffirmed its fiscal 2025 adjusted net income and EBITDA targets rather than raising them.
On the upside, American Eagle reported quarter-to-date comparable sales through Jan. 3 up in the high single digits, with its Aerie intimates banner up in the low twenties. The retailer raised fourth-quarter operating income guidance to $167 million–$170 million. Five Below delivered the biggest surprise: quarter-to-date sales rose 23.2% and comps climbed 14.5%, prompting an upgrade to roughly $1.71 billion in Q4 sales guidance and higher EPS expectations.
Analysis & implications
These early disclosures reinforce a narrative many analysts expected: holiday spending was durable in dollar terms and produced notable winners, but broad-based volume growth was limited once inflation and tariff-related price effects are considered. Premium apparel brands are grappling with inventory clean-up and selective discounting strategies that compress margins even when revenue targets are met. For investors, this creates a bifurcated landscape where margin resilience matters as much as top-line growth.
Value-oriented and specialty discounters benefited from consumer demand for lower-price, trend-driven items, evident in Five Below’s strong comps and substantial guidance lift. That momentum suggests shoppers responded to both assortment and value propositions, particularly in categories aimed at younger consumers and gift purchases. American Eagle’s Aerie strength highlights how differentiated product/marketing can drive outsized results within a broader subdued market.
For supply-chain and macro observers, the role of tariffs and markdowns is significant. Lululemon reported a 2.9 percentage-point margin hit in its fiscal third quarter tied largely to higher tariffs and heavier markdowns; similar cost or clearance dynamics could blunt earnings for other apparel names even if sales remain respectable. Going forward, the ability of retailers to manage promotions, inventory turns and freight/tariff exposure will be a key determinant of full-year profitability.
Comparison & data
| Company | Holiday-quarter metric | Result / guidance |
|---|---|---|
| Lululemon | Fiscal Q4 revenue & EPS | Revenue ~ $3.60B; EPS ~ $4.76; margins unchanged |
| Abercrombie & Fitch | Full-year sales growth / operating margin | Now at least 6% sales growth; operating margin ~13% |
| Birkenstock | Quarter sales | Up 11% to €402M ($470M) |
| Savers Value Village | Holiday sales / comps | Sales +8.4%; comps +5.4% ex-extra week |
| American Eagle | Quarter-to-date comps | High single-digit comps; Aerie up low-20s |
| Five Below | Quarter-to-date sales / comps | Sales +23.2%; comps +14.5%; Q4 sales ~ $1.71B |
The table condenses the early public figures investors parsed ahead of the broader earnings season. While some retailers lifted full-quarter guidance (Five Below, American Eagle), others merely affirmed or trimmed forecasts, indicating the headline aggregate was one of modest expansion rather than a broad rebound.
Reactions & quotes
Company executives framed results through the lens of execution and customer response, while the market reaction emphasized margin and guidance sensitivity.
We remain focused on executing our action plan to drive improvement in our U.S. business and look forward to the opportunities in front of us.
Meghan Frank, Lululemon CFO (company statement)
Context: Lululemon used a concise finance-team statement to signal stability in its guidance and to reassure investors amid leadership transition and shareholder activism.
Momentum continued in the fourth quarter with record December sales, fueled by the power of our brands.
Jay Schottenstein, American Eagle CEO (news release)
Context: American Eagle attributed the stronger-than-expected quarter to product and marketing initiatives, singling out Aerie for particularly strong performance.
We are incredibly pleased with our holiday performance, which demonstrates the effectiveness of the strategies we have been executing this year.
Winnie Park, Five Below CEO (news release)
Context: Five Below highlighted its assortment and value positioning as key drivers of a substantial sales and comps beat, prompting raised guidance.
Unconfirmed
- The precise contribution of tariffs versus markdowns to each retailer’s margin compression is not fully public and varies by company.
- The long-term outcome of Lululemon’s proxy contest and executive transition remains unresolved and may affect strategy but is not yet determined.
- Some company statements refer to quarter-to-date windows that do not cover full fiscal quarters; final audited results may differ from these early reads.
Bottom line
Early holiday reports released ahead of the ICR conference show a retail season that was solid in headline dollars but lacked a uniform, across-the-board surge in consumer spending. Winners were clear—value and well-positioned specialty brands captured disproportionate share—while several companies managed sales without delivering comparable profit expansion. Investors will be watching full-quarter reports for finalized margin detail, inventory levels, and any revisions to full-year guidance.
Looking ahead, the market should expect continued dispersion: retailers with tight inventory control, effective promotions, and differentiated product are likeliest to sustain upside, while those still clearing old merchandise or facing tariff-driven costs may see pressured margins. The broader macro lens—how much of nominal sales growth reflects higher prices versus unit demand—will determine whether this season represents genuine growth in consumer activity or a pause before a different spending cycle.