Hole Q3 2025 earnings

Attire retailer Hole stated Thursday its comparable gross sales rose 5% throughout the fiscal third quarter, pushed by sturdy income at its namesake model after its viral “Higher in Denim” marketing campaign with woman group Katseye. 

Placing apart pandemic-related spikes, the rise in comparable gross sales is the strongest development for Hole since its fiscal 2017 vacation quarter and is nicely forward of Wall Road expectations of three.1%, in accordance with StreetAccount. 

In an interview with CNBC, CEO Richard Dickson stated the corporate hasn’t wanted to low cost as typically to promote merchandise, it is successful prospects from all revenue cohorts and it is seeing a “nice begin” to the vacation procuring season. 

“Whereas exterior information factors to macro strain, significantly on the low-income client, our prospects are discovering our worth worth, [and] our kinds are breaking by means of the aggressive panorama,” stated Dickson. “Our product is resonating. So we’re very assured as we head into the vacation season.” 

Shares of Hole rose 5% in prolonged buying and selling Thursday.

Here is how the most important specialty attire firm within the U.S. carried out throughout the quarter in contrast with what Wall Road was anticipating, primarily based on a survey of analysts by LSEG:

• Earnings per share: 62 cents vs. 59 cents anticipated
• Income: $3.94 billion vs. $3.91 billion anticipated

The corporate’s web revenue throughout the three months ended Nov. 1 declined practically 14% to $236 million, or 62 cents per share, in contrast with $274 million, or 72 cents per share, a 12 months earlier. 

Gross sales rose to $3.94 billion, up 3% from $3.83 billion a 12 months earlier. 

For Hole’s fiscal 12 months, which is slated to finish round early February, the corporate is now guiding to the excessive finish of its beforehand launched gross sales forecast, anticipating gross sales to rise between 1.7% and a couple of%, according to analyst expectations. It beforehand anticipated gross sales to rise between 1% and a couple of%.

The corporate is now anticipating its full-year working margin to be round 7.2%, in comparison with its earlier vary of between 6.7% and seven%. The forecast consists of the affect of tariffs, estimated to be between 1 and 1.1 share factors. 

Comparable gross sales throughout Hole, which owns its namesake banner, Outdated Navy, Athleta and Banana Republic, have been optimistic now for seven straight quarters. Below Dickson, the corporate has been as centered on boosting profitability and fixing operations because it has been on reigniting cultural relevance, which has led to sustained gross sales development throughout the portfolio. 

Hole’s profitability had been rising, too, in consequence, however now that it is going through tariffs, the retailer’s gross margin and web revenue are each taking a success. In the course of the quarter, Hole’s gross margin fell 0.3 share factors to 42.4% however nonetheless got here in greater than expectations of 41.2%, in accordance with StreetAccount. 

The 14% decline in Hole’s web revenue was primarily associated to tariffs, finance chief Katrina O’Connell stated in an interview. 

Hole’s better-than-expected outcomes come as attire gross sales stay typically gentle throughout the business and shoppers pull again on nice-to-have objects like new garments in favor of requirements.

Apart from clear worth gamers like Walmart and TJX Corporations, earnings to this point this season have been muted, with some firms blaming macroeconomic situations and expressing warning concerning the vacation season. 

Dickson stated Hole’s various portfolio provides it a hedge in unsure financial instances as a result of it might probably seize customers in a wide range of completely different locations. 

“Our portfolio appeals to a variety of shoppers, which is giving us nice flexibility in immediately’s atmosphere,” stated Dickson. 

Here is a more in-depth have a look at how every of the corporate’s manufacturers carried out:

Hole’s namesake model has been the main focus of Dickson’s turnaround technique since he took the helm as CEO simply over two years in the past.

In the course of the quarter, comparable gross sales rose a staggering 7% – greater than double the three.2% achieve analysts had anticipated, in accordance with StreetAccount. Income rose 6% to $951 million.

In the course of the quarter, Hole launched its viral “Milkshake” marketing campaign, that includes the early-aughts Kelis track and members of the Katseye pop group. The marketing campaign helped gross sales, however Dickson stated Hole model’s development is “a narrative about consistency” and a mixture of higher product, advertising and partnerships. 

Gross sales at Outdated Navy, Hole’s largest model by income, rose 5% to $2.3 billion with comparable gross sales up 6%, much better than the three.8% that analysts surveyed by StreetAccount anticipated. The corporate stated it noticed development in key classes like denim, activewear, children and child. 

The elevated, work-friendly model remains to be in turnaround mode however noticed gross sales develop 1% to $464 million throughout the quarter with comparable gross sales up 4%, higher than the three.2% achieve analysts had anticipated, in accordance with StreetAccount.

This was the second quarter in a row Banana reported optimistic comparable gross sales, which the corporate attributed to raised advertising and product. 

Each income and comparable gross sales at Athleta had been down a whopping 11% to $257 million, an eyesore on Hole’s in any other case better-than-expected outcomes.

Dickson has repeatedly stated Athleta is in a reset 12 months, however how lengthy that reset will take stays unclear.

“We’ve been disillusioned within the pattern. We perceive there’s a variety of work to do, however I actually do imagine within the model,” stated Dickson. “I imagine within the management and we are going to proceed to construct this model for the long run. It does deserve it.”