Abercrombie & Fitch said it saw strong consumer demand during the holiday season, but did not have enough stock to sell, especially of Hollister and Gilly Hicks clothing.
Unusually, however, the company’s stock rose 7% in extended trading following its report despite Abercrombie’s downgrade of its fourth-quarter sales guidance, but the retailer’s stock closed down 2.5% at $32.35.
Abercrombie expects fourth-quarter revenue to grow 4-6% from 2020 levels, or swing between a 2% decline and steady compared to 2019 levels, but previously it had indicated that holiday quarter sales would grow 3-5% compared to 2019.
The company did not reveal any expected earnings figures, while on the other hand, analysts are predicting earnings of $1.59 per share with sales growing 10.7% year-on-year, according to Refinitiv analysts’ estimates, it is worth noting that Abercrombie generated sales of $1.12 billion in 2020 and $1.19 billion in 2019.
The apparel retailer said it has faced severe restrictions and impacts related to the coronavirus pandemic without elaborating on those restrictions, noting that Lululemon said yesterday that it expects to record sales at the lowest levels in its previous guidance range during the fourth quarter due to the restrictions and labor market disruptions caused by the Omicron mutant. Read More [Lululemon Sales Decline and Profits Fall In Q4].
For the full year, Abercrombie expects sales to grow 19-20% from last year, while analysts are forecasting 21.2% growth.
The company also stated that it will reduce its planned capital expenditures for the year from $100 million to just $90-95 million.