Why Cult Retailers Urban Outfitters, American Eagle Will Outperform Other Fashion Firms in Q1

It’s not all doom and gloom for retailers this season. Analysts are predicting that many will ride the wave of strong holiday sales into promising results for the first quarter of 2018.

Thomson Reuters this week released its Same Store Sales Index, tracking the anticipated performance of retailers across 11 sectors, and reported a better outlook for the industry overall than the same period last year.

Of course, there were some clear winners and losers. With regard to same store sales — a key metric in gauging how shops are performing with consumers — the analysts polled were most bullish about American Eagle Outfitters thanks to “cult following” its Aerie brand has built around its no-Photoshop campaigns and body-positive messaging. Urban Outfitters is also expected to make a strong showing, making the top 10 list alongside subsidiary brands Free People and Anthropologie.

Urban Outfitters Inc. is expected to post results for the most recent quarter on May 22, and American Eagle Outfitters will follow on May 31.

On the other side of the spectrum were struggling retailers like Sears, which has been closing locations at a rapid clip to stay afloat, and mall chains like Francesca’s and Chico’s, which are both expected to report significant slumps in sales.

Thomson Reuters also found rising consumer confidence and higher earnings growth than in 2017. The overall figures were bolstered by the Internet Retail sector, which includes heavy-hitters like Netflix and Amazon, and boasted a growth rate of 62.6 percent. Multiline Retailers like Nordstrom and Target brought up the middle at 17 percent, while Textiles, Apparel and Luxury Goods trailed at 3.8 percent. The only sector posting a decline was Leisure Products, which includes sporting goods and toy companies, at -82.3 percent.

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