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Moderate momentum defines global fashion’s Q2 2025 results
The second-quarter performance was reported over two months – August and September. Although some companies reported half-year performance too, the categorisation is strictly based on Q2 performance only.
In Q2 2025, five of nine fashion companies reported ‘moderate’ performance, two were ‘strong’, and two ‘weak’.
Brazilian brand Arezzo and US retailer Burlington led growth with higher sales and profits, while Dillard’s, Ross, Kohl’s, Ludwig Beck, and American Eagle showed mixed results.
Delta Galil and Macy’s lagged amid margin pressures and weak sales.
Strong: Growth In Both Sales & Profits
Azzas 2154 SA (Arezzo) (BVMF: ARZZ3)
The Brazilian fashion company, which reported a strong financial performance for the second quarter (Q2) of 2025 in early August, marked one year since the creation of the Azzas 2154 Group. The reported quarter’s EBITDA reached R$535.6 million (~$100.77 million), with a margin of 18.5 per cent, representing an expansion of 80 bps versus Q2 FY24.
During the quarter, gross revenue from continuing brands reached R$3.6 ($0.68) billion, growing 10.3 per cent over the same quarter last year. Including contributions from discontinued brands, the growth in gross revenue was 7.4 per cent. Division-wise, revenue for fashion and lifestyle women delivered the highest growth at 20.1 per cent, followed by fashion and lifestyle men at 11.5 per cent.
On a half-year basis, gross revenue increased 10.7 per cent from R$6,264.6 million (~$1,178.66 million) in Q2 FY24 to R$6,931.8 million.
Although the quarter’s gross margin dropped from 56.1 per cent last year to 55.9 per cent this year, the gross profit in value terms improved from R$1,554.8 million to R$1,620.5 million. The increase of 81.7 per cent in net income was also robust.
Half-year net income increased from R$257.9 million to R$655.5 million.
As of the second quarter of 2025, the Belo Horizonte-headquartered company runs 2,061 stores spanning an area of 208,452 m².
Burlington Stores, Inc (NYSE: BURL)
In late August, New Jersey-based Burlington Stores reported a ‘Strong’ second-quarter performance, marked by a total sales increase of 10 per cent on top of 13 per cent last year. Comparable store sales increased 5 per cent on top of 5 per cent last year. Net income stood at $94 million, and diluted EPS was $1.47, showing growth over net income of $74 million, or $1.15 per share, last year.
NYSE-listed Burlington is a nationally recognised off-price retailer of high-quality, branded apparel, footwear, accessories, and home merchandise at everyday low prices. Its second quarter ended August 2, 2025, with $1,694 million in liquidity.
For the first six months, total sales increased 8 per cent compared to H1 FY24, and net income increased 28 per cent to $195 million, or $3.05 per share versus $2.37 per share in the prior period. Adjusted net income, excluding $12 million and $7 million, respectively, of expenses (net of tax) associated with bankruptcy-acquired leases, was $217 million, or $3.39 per share, versus $171 million, or $2.66 per share, last year.
The company’s outlook now includes total sales growth in the range of 5 to 7 per cent for the third quarter and 7 to 8 per cent, on top of 11 per cent last year, for the full fiscal 2025.
Moderate: Growth In Either Sales Or Profits
Dillard’s Inc. (NYSE: DDS)
Dillard’s, Inc announced operating results for the 13 (Q2) and 26 (H1) weeks ended August 2, 2025.
For Q2, comparable net sales were $1.514 billion (FY25) and $1.490 billion (FY24), respectively. These sales figures include operations of the company’s construction business, CDI Contractors, LLC (CDI). Excluding CDI, total retail sales were $1.447 billion and $1.426 billion, respectively, growing 1 per cent.
Dillard’s reported net income for the quarter at $72.8 million, or $4.66 per share, including a pretax gain of $4.8 million ($3.7 million after tax or $0.24 per share) primarily related to the sale of three properties, compared to $74.5 million, or $4.59 per share, in the same quarter last year.
Consolidated gross margin for the second quarter was 36.6 per cent of sales compared to 37.6 per cent in Q2 FY24.
For the first halves of FY25 and FY24, net sales amounted to $3.043 billion and $3.039 billion, respectively.
Dillard’s is headquartered in Little Rock, Arkansas. The company operates 272 Dillard’s stores, including 28 clearance centres, spanning 30 states (totalling 46.2 million square feet), along with an e-commerce site.
Ross Stores Inc (NASDAQ: ROST)
Ross Stores, Inc reported EPS for the 13 weeks ended August 2, 2025 (Q2 FY25) of $1.56 on net income of $508 million, compared to EPS of $1.59 on net income of $527 million for the 13 weeks ended August 3, 2024. Total sales for the second quarter of 2025 increased 5 per cent to $5.5 billion, up from $5.3 billion for the same period in 2024, with comparable store sales also up 2 per cent versus last year.
A drop in net income despite an increase in sales meant a ‘moderate’ performance for the Dublin, California-based off-price retailer.
For the six months ended August 2, 2025, EPS was $3.03 on net income of $987 million, compared to EPS of $3.05 on net earnings of $1 billion in H1 FY24. Sales for the first six months of 2025 grew to $10.5 billion, up from $10.1 billion in the prior year, with comparable store sales increasing 1 per cent.
For both the third and fourth quarters, comparable store sales growth is expected to rise by 2 to 3 per cent. Based on H1 FY25 results and H2 FY25 guidance, EPS for the 52 weeks ending January 31, 2026, is now projected to be in the range of $6.08 to $6.21 versus $6.32 last year.
Ross Stores, Inc is an S&P 500, Fortune 500, and Nasdaq 100 (ROST) company that offers designer apparel, accessories, footwear, and home fashions.
Kohl’s Corp (NYSE: KSS)
Like Dillard’s and Ross Stores, Kohl’s Corp also ended the second quarter of FY25 on August 2, 2025, and announced its ‘moderate’ performance at the end of August, marked by a drop in quarterly sales but an increase in net income.
For the second quarter, net sales decreased 5.1 per cent y-o-y to $3.3 billion, with comparable sales also down by 4.2 per cent. Gross margin as a percentage of net sales was 39.9 per cent, increasing by 28 basis points, while net income improved to $153 million, or $1.35 per diluted share, compared to net income of $66 million, or $0.59 per diluted share, in the prior year.
On a half-year basis, net sales decreased 4.6 per cent y-o-y to $6.4 billion, with comparable sales also dropping by 4 per cent. Gross margin was recorded at 39.9 per cent of sales—an increase of 33 basis points. Net income for the first half amounted to $139 million, or $1.23 per diluted share, and adjusted net income reached $50 million, or $0.44 per adjusted diluted share. Comparable net income for the same period last year was $39 million, or $0.35 per diluted share.
Wisconsin-based Kohl’s is a leading omnichannel retailer that operates more than 1,100 stores in 49 states, an e-commerce site, and the Kohl’s App.
For the full year 2025, the company currently expects a decrease of 5 to 6 per cent in net sales, a decrease of 4 to 5 per cent in comparable sales, an adjusted operating margin in the range of 2.5 to 2.7 per cent, and adjusted diluted EPS in the range of $0.50 to $0.80.
Ludwig Beck am Rathauseck (ETR: ECK)
According to Ludwig Beck’s consolidated interim report for 2025, the company generated gross sales of €37.8 million (~$44.37 million) in the first half of FY25, compared to €37.2 million (~$43.67 million) last year, representing an increase of 1.5 per cent. Sales in the ‘textile’ segment increased from €28.3 million in the previous year to €29 million. The Ludwig Beck online shop also developed positively, recording a 5.4 per cent increase in sales compared to the previous year.
Gross profit increased from €15.1 million (~$17.73 million) to €15.5 million (~$18.19 million) in the first half of the year, and gross profit margin improved to 48.8 per cent from 48.1 per cent in H1 FY24, due to lower price reductions. However, the company’s earnings after taxes (EAT) continued to plummet further to €-2.7 million from €-1.5 million last year.
For the second quarter, sales revenue increased to €19.5 million versus €18.5 million in Q2 FY24, and EAT dropped further from €-0.4 million last year to €-0.7 million, confirming a moderate performance.
The company highlighted three main challenges affecting the German retail sector in the first half of 2025: volatile consumer sentiment, declining customer footfall, and continuing cost increases. Nevertheless, the company looks confidently to the third quarter of 2025 and is counting on general conditions stabilising again, allowing management to adhere to the forecasts published in March 2025.
American Eagle Outfitters (NYSE: AEO)
NYSE-listed American Eagle Outfitters is an American fashion company that delivered a moderate second-quarter performance, including operating income of $103 million, which increased 2 per cent on revenue of $1.28 billion, exceeding expectations.
The company’s second quarter ended August 2, 2025, with net revenues and comparable sales both declining 1 per cent over the same quarter last year. The operating margin of 8 per cent expanded 20 basis points from last year.
The company paid $21 million via its quarterly cash dividend of $0.125 per share, bringing YTD cash dividends to $43 million.
Based on the latest trade policies and estimated tariffs, the Pittsburgh-based company shared its third- and fourth-quarter, and full fiscal 2025 outlook: comparable sales to remain up low single digit in both quarters and approximately flat for the full year; and operating income to stay between $95 and $100 million, $125 and $130 million, and $255 and $265 million, respectively.
American Eagle Outfitters, Inc is a global specialty retailer with a portfolio of apparel brands including American Eagle, Aerie, OFFL/NE by Aerie, Todd Snyder, and Unsubscribed.
Weak: No Growth In Sales & Profits
Delta Galil Industries (TLV: DELT)
Delta Galil Industries, Ltd—the global designer, manufacturer, and marketer of branded and private-label intimate, activewear, loungewear, and denim apparel for ladies, men, and children—reported a ‘weak’ financial result for the second quarter ended June 30, 2025.
The Caesarea-based company reported a decline in both sales and profits in mid-August, with sales of $470.1 million remaining stable from the prior-year quarter, though own-web sales increased 29 per cent, representing the tenth consecutive quarter of double-digit growth.
Net income in Q2 2025 was $16.7 million, compared to $21.0 million last year. However, net income in H1 2025 increased to $34.3 million, compared to $33.1 million a year earlier. Net income excluding non-core items, net of tax, stood at $34.3 million, compared to $35.5 million in H1 FY24.
The company revised its 2025 guidance, excluding non-core items, based on exchange rates of $1.15 to €1 and 3.45 NIS to $1, and current tax and tariff rates. The guidance now projects sales of $2,110 to $2,135 million against previously announced $2,118 to $2,165 million; EBIT of $171 to $176 versus $192 to $200; and net income of $97 to $101 compared to earlier $112 to $118.
The company declared a dividend of $8 million, or $0.3065 per share, on September 9, 2025.
Macy’s Inc (NYSE: M)
New York-headquartered Macy’s reported second-quarter 2025 results in early September and raised its annual net sales and adjusted diluted EPS guidance.
Macy’s, Inc achieved net sales of $4.8 billion, declining 2.5 per cent despite exceeding the company’s guidance. Comparable sales were up 0.8 per cent on an owned basis and 1.9 per cent on a comparable owned-plus-licensed-plus-marketplace basis, also above the company’s guidance, benefitting from positive comparable sales across nameplates (brands).
Gross margin rate of 39.7 per cent declined 80 basis points, reflecting proactive markdowns on remaining early spring product to maintain healthy inventories and products bought under prior tariff rates.
GAAP net income for the quarter was reported at $87 million (2024: $150 million), or 1.7 per cent (2024: 2.9 per cent) of total revenue, and adjusted net income amounted to $113 million (2024: $149 million), or 2.3 per cent (2024: 2.9 per cent) of total revenue.
The company raised its annual guidance, including net sales and adjusted diluted EPS, to reflect second-quarter 2025 performance and the anticipated gross margin impact of current tariffs in Q3 and Q4 2025.
Revised annual guidance now includes net sales of $21.15 billion to $21.45 billion and adjusted diluted EPS of $1.70 to $2.05. However, adjusted EBITDA and core adjusted EBITDA, as percentages of total revenue, remained unchanged at 7.4 to 7.9 per cent and 7.0 to 7.5 per cent, respectively.
Macy’s owns the iconic brands Macy’s, Bloomingdale’s, and Bluemercury.
Fibre2Fashion News Desk (SB – WE)
