US retail earnings preview: Premium apparel may still have room for upward revisions as promotions and refunds test margins

Which apparel brands could deliver stronger quarterly results?

JPMorgan raised its fiscal 2027 second-quarter earnings per share estimate for Ralph Lauren to $4.29, above the consensus of $4.24; revenue is expected to grow 7.2% at constant currency, above the company's guidance of 5%–6%. The bank is optimistic about sales in North America and Asia and expects an improved sales mix to lift gross margin by 110 basis points year over year.
Its fiscal 2027 first-quarter earnings per share estimate for Tapestry was raised to $1.59, above the consensus of $1.56 and company guidance of approximately $1.55. The main driver is a forecast for Coach revenue in Greater China to grow 45% at constant currency, above the consensus of 35%.
North America remains a key area to watch for Tapestry: The bank expects first-quarter growth of 6%, down from 10.6% in the previous quarter; its model shows a further slowdown to 3% in the second quarter. If Coach's North American growth reaches 5% in the second quarter, the bank estimates earnings per share could increase by another $0.04, all other assumptions unchanged.

JPMorgan expects revenue at Capri's Michael Kors to fall 11% year over year in the second quarter of fiscal 2027, with the decline narrowing to 0.7% in the third quarter; the company's second-half plan implies revenue growth of approximately 1.5% for the brand.
Second-quarter retail sales were weighed down by inventory delays and sales-quality measures such as reduced promotions; by the third quarter, approximately 75% of the outlet accessories assortment is expected to have been refreshed, and the revenue drag from first-half sales-quality measures will also roll out of the year-over-year comparison.
The bank observed strong sales of new handbags during its field checks, with outlet traffic and conversion rates rising; it has not observed price resistance to planned price increases so far. Second-quarter gross margin is expected to rise 260 basis points year over year, but air freight costs caused by inventory delays offset approximately 100 basis points of that improvement.

V.F. Corporation's fiscal 2027 second-quarter gross margin is expected to rise 180 basis points year over year, above the consensus of 120 basis points. Alongside improved inventory planning and full-price sales, the effect of exchange rates on gross margin is expected to shift from a 140-basis-point drag in the first quarter to a 30-basis-point benefit in the second quarter.
But brand investment is pushing up expenses: The bank expects second-quarter selling and administrative expenses as a share of revenue to rise approximately 170 basis points year over year. Vans revenue is expected to fall 5% in the third quarter and grow 1% in the fourth, with the improvement partly dependent on the timing of wholesale shipments; third-quarter gross margin also faces pressure from tariff costs and the prior-year refund comparison.
Under Armour faces tougher promotional competition. JPMorgan expects its North American revenue to fall 8.8% in the second quarter of fiscal 2027 and sees risk in the assumption that the revenue decline will narrow in the second half; the company's priority of increasing the share of full-price sales will also constrain current revenue performance.
The bank expects Under Armour's fiscal 2028 earnings per share to be $0.08, below the consensus of $0.19. One key reason is that the profit benefit from a one-time $70 million tariff refund in fiscal 2027 will not recur.

JPMorgan expects Bath & Body Works' third-quarter 2026 revenue to fall 2.1% year over year, better than the 2.3% decline in the second quarter and the consensus forecast of a 2.9% decline; sales of new products and a lower year-ago comparison base provide support.
As the revenue decline narrows, the bank expects third-quarter operating margin to fall 445 basis points year over year to 5.6%, citing factors including product investment and concentrated spending ahead of the holidays. Management aims to return to revenue growth in fiscal 2027, but the bank forecasts growth of 0.9%, still below the consensus of 1.6%.
Same-store sales at Gap's Old Navy are expected to improve from a 4% decline in the second quarter to 0.3% growth in the third, but the bank believes the improvement later in the quarter depends on deeper promotions. Some tariff cost savings have been used to support promotions; combined with freight and fuel pressures, JPMorgan expects Gap's fiscal 2027 earnings per share to be $2.47, below the consensus of $2.63.

JPMorgan lowered its forecast for Boot Barn's fiscal 2027 third-quarter same-store sales growth to 1%, below the consensus of 3.8%. The bank estimates that same-store sales in October shifted to a range from flat to down 1%, slowing from 2% growth in August and the first half of September.
Buy-side thresholds for discount retailers vary widely: Third-quarter same-store sales at Ross are expected by the buy side to grow approximately 10%, above the company's guidance of 6%–7%; the buy-side expectation for Burlington has fallen from 3% at the end of September to 2%, within the company's guidance range of 1%–3%. The bank also noted that weather in the Northeast in the second half of October could affect sales at the end of the quarter.