Traditional mall retailers and brands headed into the holidays with strong performances across key categories. Across the sector, retailers report executing tight inventory and pricing strategies that they anticipate will set them up for success during Q4. Increased sales were fueled by a mix of higher tickets, better full-price sell-throughs and private brands. They also indicated they’re investing in technology to improve inventory and pricing efficiency.
While outerwear saw some weakness due to warmer weather, denim and intimates proved to be strong performers on trend-right product and enticing fabrications. Retailers credited high-profile marketing campaigns featuring celebrities and strategic collaborations with driving excitement and sales.
American Eagle Outfitters, PVH, and Victoria’s Secret cited tariffs as a headwind, with mitigation efforts mainly focused on targeted price increases and vendor negotiations.
American Eagle Outfitters, Inc.
- Aerie was the biggest driver of American Eagle Outfitter, Inc. sales during the quarter, with a 12.6% revenue increase and 11% comparable sales increase. Bras and underwear outperformed with double-digit growth, which the company attributes to its distinct comfort fabric and new prints.
- American Eagle Outfitters, Inc. added 5 stores in the quarter, ending with 1,190 stores: 830 American Eagle stores, 329 Aerie and Offline stores, 23 Todd Snyder stores, and 8 Unsubscribed stores.
- Guidance: Based on strong sales results, the company raised its full year outlook. Comparable sales are projected to be in low single digits, up from prior guidance of flat comparable sales. The full year operating income increased to $303 to $308 million, up from previous guidance of $255 to $265 million.
Inventory
American Eagle Outfitters, Inc. reported total inventory increased 11% with units up 8%. The inventory includes the impact of increased costs due to tariffs. The company stated tariff impacts were $20 million in 3Q 2025 and are expected to be $50 million in 4Q 2025. It expects tariff impacts in 1Q and 2Q of 2026 to be $25 to $30 million.
Two high profile marketing campaigns, fronted by Sydney Sweeney and Travis Kelce, which drove more than 44 billion impressions and led to out of stocks in the denim category. The specific jeans Sweeney wore sold out in two days. Jay Schottenstein, Executive Chairman and CEO, American Eagle Outfitters, Inc., said, “we couldn’t really keep up with that demand…Good news there. Bad news…The top five jeans, just to give you some perspective, … in women’s we planned up 25%. They were up 50% on demand. So, we had a lot of work to do.”
The company is resetting its denim inventory to ensure it is in stock. For 4Q, it plans for inventory to be in line with sales growth.
Pricing
American Eagle Outfitters, Inc. stated it is not raising prices to pass on the tariff impact to customers. The company stated it has raised prices on selected items while continuing to offer promotions, with the overall goal of maintaining the price-value equation and preserving conversion rates. The reported average unit retail was flat compared to the quarter last year and management expects the AUR to be flat in 4Q.
Consumer behavior
Growth in the quarter was driven by the Aerie brand, with strength across all categories including intimates, sleep and apparel. Offline, the company’s activewear brand, is gaining market share with new silhouettes and signature items, such as its core leggings.
American Eagle had a positive improvement in the quarter with 1% comparable sales led by positive trends in men’s jeans and non-denim pants, as well as tops, sweaters, fleece, graphics and knits. The women’s category was not as strong due to out-of-stock items early in the quarter. Additionally, the company said non-denim pants, shirts and dresses proved less popular. However, consumers responded positively to jeans, fleece tops and knits, and the in-stock position improved later in the quarter, which helped results to trend upwards into the fourth quarter.
PVH
- By region, the Americas revenue increased 2% year-over-year (YoY); Asia Pacific (APAC) revenue decreased 1% YoY; and Europe, the Middle East, and Africa (EMEA) revenue increased 4% YoY. Licensing revenue increased by 11% YoY.
- 3Q 2025 direct-to-consumer revenue was flat compared to 3Q 2024. Wholesale revenue increased 4% compared to the prior year period.
- Guidance: For the full year, the company increased revenue outlook to low single-digits compared to increase slightly to low single-digits previously. The earnings per share outlook increased to a range of $10.85 to $11.00 on a non-GAAP basis compared to $10.75 to $11.00 previously. The outlook includes an estimated net negative impact related to the tariffs currently in place for goods coming into the US.
Inventory
PVH report Inventory increased 3% compared to the prior year period, which includes a 2% increase due to tariffs. The company said it is tightly managing inventory, which led to this “significant improvement” compared to 2Q 2025 where inventory was up by 13% YoY. PVH feels inventory is well-positioned for holiday, inventory is current and the company is on track with inventory aligned to its sales plan.
Pricing
The company had higher promotions in the quarter, which impacted its gross margin by 50 basis points. Additionally, 110 basis points of the gross margin were due to the impact of tariffs. The company expects tariffs to have an overall net negative impact on earnings for the year of $65 million.
Consumer behavior
The company reported growth in denim in the Americas, due to newness and a strong presentation as well as an improved fit guide and enhanced associate training.
PVH reported “an especially tough season” for cold weather outerwear in Europe given the warm fall. Additionally, it said customers are increasingly reaching for transitional weight options so it will continue to shift product in that direction.
Key growth areas across all regions for Tommy Hilfiger include sweaters, shirts, and pants. Tommy Hilfiger had double digit growth in transitional outerwear and sweaters, up 20% across men’s and women’s in China.
For Calvin Klein, the company is leveraging celebrities to drive sales growth in underwear and denim, its two biggest categories that comprise two-thirds of its sales. In its underwear category, ad campaigns with Bad Bunny and music star Rosalia promoting Icon Stretch underwear products drove double-digit sales globally. Additionally, campaigns featuring athletes also drove 20% sales growth in Icon Stretch underwear and grew total underwear sales mid-single digits. K-pop star Jung Kook was featured in Calvin Klein’s denim ad; the ad went viral, driving sales.
Tilly’s Inc.
- E-commerce sales decreased by 9% during the quarter compared to 3Q 2024. This is due to a 51% reduction in clearance sales online compared to last year’s third quarter.
- Tilly’s ended the third quarter with 230 total stores compared to 246 total stores at the end of 3Q 2024. The company expects to close seven stores in 4Q, with an ending fiscal year store count of 223.
- Guidance: Tilly’s provided 4Q 2025 guidance only. The company expects total net sales to be in the range of approximately $146M to $151M, translating to a comparable net sales increase of 4% to 8%. The loss per share is expected to be in the range of ($0.19) to ($0.12), compared to a loss per share of ($0.45) in 4Q 2024.
Inventory
Tilly’s reported inventory was down 12.8% at the end of the quarter, compared to the year ago period. This is due to higher inventory levels last year from back to school and a disappointing holiday season, so the company has been working through its inventory position throughout the year through discounting and reselling.
Tilly’s is implementing tools in 2026 to improve inventory efficiency and accuracy, an AI-driven replenishment and allocation tool and RFID. The company is also exploring agentic AI, which has opportunities to automate aspects of merchandise planning, allocation, distribution, store labor planning, and market campaign development.
Pricing
The gross margin improved by 460 basis points overall, with product margins improving by 390 basis points due to higher markups and lower markdowns and reduced, more current inventories than 3Q 2024.
Tilly’s launched an AI-driven price optimization tool in September, 2025. Early results of the tool show an improvement in product margins and sell-through rates through higher average unit retail (AUR) selling prices and sharper, more surgical pricing decisions.
Consumer behavior
Tilly’s plans to increase the sales penetration of its proprietary brands to approximately 40% on an annualized basis, an increase from 37% today. The company has seen strong sell-through of its proprietary brands, particularly RSQ Jeans, its number one brand for the past several years.
The company saw rapid growth in sales from the launch of its TikTok shop in March 2025. It is investing in marketing focusing on the six consumer profiles derived from a customer segmentation survey. The company is becoming more active on social media to build brand awareness. In October, it launched a brand ambassador campaign with singer Loren Gray, who has over 50 million followers.
Victoria’s Secret
- In North America, the Victoria’s Secret brand delivered a strong mid-single digit increase in sales versus last year, while PINK achieved a low double-digit sales increase.
- International retail sales grew in the high teens driven by performance in China, particularly during the 11.11 Singles’ Day selling period.
- Guidance: The Company is raising its full year outlook and is now forecasting net sales in the range of $6.45B to $6.48B, compared to prior guidance of $6.33B to $6.41B. Adjusted net income per diluted share for the full year 2025 is estimated to be in the range of $2.40 to $2.65, compared to prior guidance of $1.80 to $2.20. This outlook includes an estimated net tariff impact of approximately $90 million for fiscal year 2025, compared to prior guidance of $100 million.
Inventory
Ending inventory was up 6.8% for the quarter. For the fourth quarter, the company expects total inventory to be up mid-teens compared to 4Q 2024, driven by growth to support the business, the impact of tariffs and a strategic shift to ocean freight from air freight.
Pricing
Victoria’s Secret pulled back on its promotions during the quarter, using strategies like gift with purchase to help increase average order value. During the quarter, average unit retails were up 3%.
The company anticipates tariff impacts for the full year to be $90 million, with approximately a $65 million impact in 4Q 2025. Reported mitigation strategies include targeted promotions and strategic price modifications, optimizing costs with vendors, diversifying sourcing, and balancing air and freight logistics.
Consumer behavior
The catalyst for growth in intimates was Victoria’s Secret fashion show. The company credited the show with its intimates’ business up mid-single digits and the company gaining over 1% market share in the US intimates’ market. In the four weeks following the show, streaming views reached approximately 61 million, up over 60% versus last year and the company gained nearly 9 million new social followers. On the day of the show, traffic to the company’s website surged over 60% year over year, converting over 15% new customers. The show appealed to 18- to 34-year-olds, and resulted in a reported double-digit growth in new customers.
Victoria’s Secret saw a mid-single digit increase in its bra business during the quarter due to innovations in the category including its “Better than Braless” Body by Victoria Flex Factor bra and an expanded range of sports bras.
Under the Pink banner, which is targeted to 18- to 24-year-olds, the company experienced double-digit sales growth driven by a LoveShackFancy collaboration. Fifteen percent of customers shopping for the collaboration were new to the brand. Pink intimates also returned to growth in the quarter.
Hillary Super, Victoria Secret & Co, CEO, said, “Customer acquisition and reactivation is something that we are extremely focused on, very excited about. And happy to report that we are seeing it directed to 18-24-year-olds. So that was our goal. We are seeing that come to life. I would also add that they’re coming in on a higher AUR. She added the product and promotions are clearly resonating, as these customers are coming to store looking for specific items. “They’re bringing their phones in and saying, ‘I need this,’” she said.
Zumiez
- North America sales were $.24B, up 7.5% from 3Q 2024; International sales were $.36B, up 1.7% from the year-ago period.
- Zumiez reported comparable sales grew 7.6%, which was the six consecutive quarter of positive comparable sales growth. The North American business fueled performance with 10% comparable sales.
- Comparable sales performance was led by women’s and hard goods in the skate category, up double digits, followed by men’s and accessories, up low to mid-single digits.
- Guidance: The company maintained its full year outlook for sales growth between 4.5% to 5% and earnings per share of $0.57 to $0.67.
Inventory
Inventory was down by 3.5% at the end of the quarter. The gross margin improved by 240 basis points, of which 30 basis points was attributed to lower inventory shrinkage, 100 basis points in improvement in product margin, and 110 basis points on store occupancy costs and store closures.
The company reported it is confident with its inventory position and that it is off to a strong start to the holiday season. “We achieved our best third quarter in several years,” said Rick Brooks, Chief Executive Officer of Zumiez Inc. “The work we have done enhancing our brand and merchandise assortments continues to resonate with our consumers, especially in North America, evidenced by the sharp sequential increase in the region’s comparable sales trends to double digits. Importantly, the holiday season is off to a strong start with overall comps up 6.6% fourth quarter-to-date and up 8.7% over the Black Friday to Cyber Monday timeframe.”
Pricing
Dollars per transaction were up for the quarter, driven by an increase in average unit retail, while units per transaction were roughly flat year-over-year. The company highlighted that its premium pricing strategy supports margin expansion and market share growth.
Consumer behavior
During the quarter, the strongest categories were women’s and hardlines, driven by the skate category. Skate hard goods, specifically, had been trending negatively since 2020, and is now experiencing a turnaround.
Another standout is the company’s private-label brand, which accounts for 31% of Zumiez’s sales, compared to 11% to 12% in 2020. The company is seeing demand in private label and a willingness to pay full price. “And I think in these categories, these cut and sew categories in our private label business, we’re in some cases, we’re the premium price player amongst our competitors in the market. So, it really says we’re doing [something] special for customers,” CEO Richard Brooks said. He added the growth in private label demonstrates the “organization’s ability to identify emerging trends and create compelling products that resonate with our customers, while simultaneously enhancing our margin profile.”
The men’s and accessories categories had low to mid-single digit gains in the quarter and footwear was the only category that was negative.
