Retail's Early Holiday 2025 Results Indicate Modest Growth

Early holiday results from various retailers indicate a mixed performance for the 2025 shopping season. While some companies reported solid results, others fell short of expectations. Lululemon, which is navigating a leadership transition and a proxy battle with its founder, anticipates its fiscal fourth-quarter revenue to reach approximately $3.60 billion, with earnings per share around $4.76. This projection aligns with the high end of its previously released guidance. Conversely, Abercrombie & Fitch has reduced its sales growth forecast despite reporting record sales, leading to an 18% drop in its stock.

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Lululemon's finance chief, Meghan Frank, emphasized the company's focus on improving its U.S. business and executing its action plan. The brand has recently adopted a more aggressive discounting strategy to manage inventory, which has impacted its margins. Abercrombie & Fitch now expects full-year sales growth of at least 6%, down from an earlier estimate of 6% to 7%.

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Birkenstock reported an expected sales increase of 11% for the holiday quarter, projecting revenues of €402 million ($470 million). Savers Value Village also saw an 8.4% sales growth, reaffirming its fiscal outlook despite only modest adjustments. In contrast, American Eagle reported a strong holiday season, with sales up in the high single digits, prompting the company to raise its fourth-quarter operating income guidance to between $167 million and $170 million.

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The National Retail Federation has forecasted a retail sales increase of 3.7% to 4.2% for November and December 2025 compared to the previous year. However, analysts caution that when accounting for higher prices due to tariffs, volume growth may remain flat. The early results suggest that while some retailers are experiencing growth, the overall consumer spending landscape is not witnessing significant gains.

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Despite some positive reports, the overall sentiment among analysts is cautious. Concerns about the effectiveness of discounting strategies and the potential impact of economic factors on consumer spending have been raised. The mixed results highlight the challenges retailers face in a competitive market, where consumer behavior is increasingly influenced by economic conditions.

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• “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, Finance Chief, Lululemon

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• “Importantly, we delivered balanced growth across our regions, brands, and channels.” — Fran Horowitz, CEO, Abercrombie & Fitch

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• “We are incredibly pleased with our holiday performance, which demonstrates the effectiveness of the strategies we have been executing this year.” — Winnie Park, CEO, Five Below

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The early holiday results reflect a landscape of cautious optimism, with standout performances from certain retailers amidst broader economic challenges.

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