Core Insights - Skims has secured $225 million in funding led by Goldman Sachs Alternatives, raising its valuation to $5 billion [1] - The company was previously valued at $4 billion in July 2023 and $3.2 billion in January 2022 [2] - Skims reported $750 million in sales for 2023, a significant increase from $500 million in 2022, and became profitable with nearly $713 million in net sales [3] Company Overview - Founded in 2019, Skims started as a shapewear brand focused on body positivity and inclusive sizing, expanding into loungewear, swimwear, and menswear [4] - The brand has established partnerships with the NBA, WNBA, and USA Basketball, and collaborated with Nike to launch a women's activewear line [4] Retail Expansion - Skims is aggressively expanding its retail presence, opening its first permanent store in Georgetown in 2024, with plans for 16 new U.S. stores this year [5] - The company is also expanding internationally, with plans for standalone stores in London and Dubai by mid-2026, and 15 stores in Israel by 2026 [6] Ownership and Demographics - Kim Kardashian retains the largest ownership stake in Skims, estimated at 35%, contributing to her net worth of $1.7 billion [7] - Nearly 70% of Skims' customers are millennials or Gen Z consumers [7]

Core Insights - Figs (FIGS) is valued at $1.33 billion and operates as a direct-to-consumer healthcare apparel and lifestyle brand, offering a range of products including scrubs, lab coats, activewear, and masks [1] - The stock has shown strong technical momentum, reaching a two-year high of $8.24 on October 22, and has gained 30% over the past year [4][3] Company Overview - Figs designs and sells healthcare apparel and non-scrub offerings, including sports bras, performance leggings, and loungewear, primarily through its website and mobile app [1] - The company has a 100% "Buy" technical rating from Barchart, indicating strong market confidence [4][5] Stock Performance - Since the Trend Seeker "Buy" signal was issued on October 15, the stock has appreciated by 5.28% [2] - Figs has achieved 9 new highs and a 17.25% gain in the last month, with a current trading price of $8.11 and a 50-day moving average of $7.09 [5] - The Relative Strength Index (RSI) is at 71.24, suggesting the stock is in a strong upward trend [5]

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Financial Data and Key Metrics Changes - For the second quarter, sales increased by 2% year-over-year to $991 million, with operating profit rising by 22% and EPS increasing by 60% to $0.24 [9][14][15] - Gross margin improved by 145 basis points to 41.2%, while operating margin expanded by 255 basis points to 15.5% [10][14] - SG&A expenses decreased by 2% compared to the prior year, resulting in a 110 basis point leverage [11][14] Business Line Data and Key Metrics Changes - The intimates business experienced a decline compared to last year, while basics saw low single-digit growth, active products grew nearly 30%, and new businesses, including scrubs and loungewear, grew by 165% [10][60] - Operating margin for the quarter was driven by cost restructuring actions and productivity improvements [11][15] Market Data and Key Metrics Changes - On a constant currency basis, sales in The Americas increased, were flat in Australia, and decreased slightly by about $5 million in The US [10] - The US Interwear market faced ongoing consumer headwinds, particularly in the intimate apparel category [10] Company Strategy and Development Direction - The company is focused on innovation, expanding product categories, and investing significantly in brand development, with spending levels more than double compared to four years ago [7][8] - The strategy includes leveraging advanced analytics and AI for operational improvements and maintaining a diversified supply chain [8][9] - The company aims to drive increased shareholder returns through consistent sales growth, margin expansion, and continued debt reduction [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current macroeconomic conditions and consumer demand dynamics, citing strong performance and visibility into the second half of the year [6][27] - The company raised its full-year guidance, expecting sales to reach approximately $3.53 billion, operating profit to increase by 17%, and EPS to rise by 65% [16][17] Other Important Information - The company has paid down $1.5 billion of debt, reducing leverage by nearly 2.5 turns over the past two years [9] - Management highlighted the importance of mitigating tariff impacts and maintaining competitive pricing strategies [33][42] Q&A Session Summary Question: What drove the outperformance in the quarter and the increased outlook? - Management noted strong performance across key metrics, with operating margin at 15.5%, driven by cost savings and productivity initiatives [22][23][27] Question: Insights into tariff impacts through 2025 and 2026? - Management indicated that tariff costs would not be felt until Q4 and expressed confidence in mitigating these costs through proactive measures [32][34] Question: Pricing pushback in the mass channel? - Management acknowledged the importance of pricing as part of the tariff offset strategy and expressed confidence in their ability to implement price increases supported by brand strength [38][42] Question: Bringing international business profitability closer to US operations? - Management stated that cost savings initiatives are being applied broadly, and improvements are being seen consistently in the international business [46][48] Question: Benefits of lower cotton on margins and competition from private labels? - Management noted that cotton is a small percentage of total costs and emphasized that the broader innerwear business is performing well despite challenges in the intimates category [55][60][62]

Core Insights - American Eagle Outfitters (AEO) and Nordstrom (JWN) are competing in the Retail – Apparel and Shoes sector, each adapting to changing consumer preferences and economic challenges with distinct strategies [1][4] - Nordstrom targets an affluent demographic through a dual-channel model, combining full-line department stores with Nordstrom Rack, and emphasizes a high-touch shopping experience [2] - AEO focuses on a younger, value-conscious audience with its brands American Eagle and Aerie, leveraging trends in comfort and digital engagement [3] Nordstrom's Strategy and Performance - Nordstrom is pursuing three main goals: growing the Nordstrom brand, improving operations, and strengthening Nordstrom Rack, with a focus on inventory management and faster product delivery [5] - The company has seen significant online sales contributions, utilizing new technologies for inventory management and enhancing customer engagement [6] - Improvements in the supply chain have led to a 40% reduction in return processing time, increasing efficiency and sales potential [7] American Eagle's Strategy and Performance - AEO is implementing its Powering Profitable Growth Plan, focusing on digital innovation, supply chain automation, and customer experience [8] - The company reported strong operating income growth in Q4 of fiscal 2024, driven by effective cost controls and improved operating margins [9] - Aerie is a key growth driver for AEO, focusing on innovation and expanding customer reach in the body-positive market [10] Financial Outlook and Comparisons - AEO anticipates mid-single-digit revenue declines for Q1 of fiscal 2025, with projected operating income of $20-$25 million, impacted by a stronger U.S. dollar [12] - For fiscal 2025, AEO expects low-single-digit revenue dips and a gross margin decline, with operating income projected at $360-$375 million [13] - In contrast, Nordstrom's fiscal 2025 sales and EPS estimates imply year-over-year growth of 2.2% and 1.8%, respectively [14] Valuation and Stock Performance - Nordstrom trades at a forward P/E ratio of 10.89X, below the industry average, indicating reasonable valuation [15] - AEO has a lower P/E ratio of 9.68, positioning it as a more value-oriented option [15] - Over the past year, Nordstrom has gained 16.5%, while AEO has declined by 47.9%, highlighting Nordstrom's stronger stock performance [16] Conclusion - Nordstrom is positioned as a stronger long-term investment due to consistent strategic execution and brand equity, expanding its digital capabilities [18] - AEO shows growth potential but faces volatility and uncertainty, particularly with its fiscal 2025 outlook [19] - For investors seeking stability and long-term value, Nordstrom is the preferred choice, currently rated as a Zacks Rank 2 (Buy) [20]