Abercrombie & Fitch‘S growth story is starting to slow down.
The Apparel Retaile Issured Weaker-That-Expected Guidance for its current Quarter and Fiscal 2025, and Said it expects its its sales will grow more slow more than Wall Street Anticipated.
Abercrombie is expecting sales to rain 3% and 5% in fiscal 2025, well below estimates of 6.8% growth, according to lseg. DURING Its Current Quarter, The Company Anticipates Earnings Per SHARE WILL BE BETWEEN $ 1.25 and $ 1.45, short of expectations of $ 1.97.
The company’s shares fell more than 7% in Premarket Trading.
Beyond Its Guidance, Abercrombie Narrowly Beat Wall Street’s Expectations in its Fiscal Fourth Quarter. Here’s how the retailer performed compared with what wall street was anticipating, based on a survey of analysts by lseg:
- Earnings per share: $ 3.57vs. $ 3.54 Expected
- Revenue: $ 1.58 billionvs. $ 1.57 billion expected
The company’s reported net income for the three-month period that ended Feb. 1 was $ 187 million, or $ 3.57 per share, compared with $ 158 million, or $ 2.97 per share, a year earlier.
Sales rose to $ 1.58 billion, up 9% from $ 1.45 billion a year earlier. Like other retailers, abercrombie benefited from an extra seling week in the year -go period. That negatively skewed comparisons for many companies, but abercrombie sales jumped even with one less seling
Beyond sales and earnings, abercrombie said it expects another key metric – operating margin – to be lower than wall street anticipated in the current quality. Abercrombie is expecting its operating margin to be in a range of between 8%and 9%, well behind estimates of 12.8%, according to streetaccount.
In January, abercrombie offered Investors a Glimpse Into Its Holiday performance when it released an early set of results and raised its fourth -Quarter outlook. Still, its stock tumbled that day beCause the forecast showed that abercrombie was expecting its growth to moderate and thought it is open not increate Forecast. Concerns Around its operating margin
However, not all of abercrombie’s guidance was a disappointment. DURING Its Current Quarter, It Expects Sales to Rise Between 4%and 6%, In Line With Expectations of 5.8%, According to LSEG. For the full year, it anticipates earnings will be between $ 10.40 and $ 11.40 per share, which at the mid to high end is higher than expectations of $ 10.83 per share.
Following about two years of explosive stock and sales growth, abercrombie’s business appearance to be Leveling out, and the markets may be turning away from retail’s biggest star in favorite star in favorite star of names wit Immediati UPSide.
The company is still growing, and working to build out its international market, but it’s untilar if it’s still going to Under Ceo Fran Hrowitz. It faces tough Prior-Year Comparisons, and some of the buzz from the turning might be starting to fade.
Plus, consucers have been noticably captive since the start of the year, which is always going to pressure specialty retailers that sell discretionary goes like clothes. Geopolitics, Unseasonally Cool Weather and Mass Trageidies Like the Wildfires in Los Angeles have damned consumer demand, but shoppers are also also also also threads like every thing people. In February, Consumer Confidence Slipped to Its Lowest Levels Since 2021.
The Slowdown is Most Acute at Abercrombie’s Namesake Banner, which has been leading the company’s growth in Prior Quarters More Than Holisters, its chain that cats more to teenagers.
DURING The Quarter, Sales at Abercrombie Grew Just 2%, While Holister Sales Jumped 16%. Comparable Sales at Abercrombie Rose 5% While Holister Comps Spiked 24%.
The results mark a turning point for the company and indicate the holister brand could voice against against against a more important growth driver ahead.It also also puts pressure
The start of the year has been a bit WorsE than expected for a number of other companies, including Target and Elf beautyLike ELF, abercrombie even an impact from the proposed tiktok ban, which dragged on the cosmetics company’s performance at the start of the year.
Both of the companies relay on tiktok for marketing. In February, ELF CEO Tarang Amin Told CNBC that He Suspects The Proposed Ban Impacted cosmetics sales because people weren’t Posting Things Like “Get Ready With Me” Videos or Clothing hauls, which can drive sales.
In a news release in january, hrowitz signaled that moving forward, abercrombie will be more focused on boosting profits than sales as it looks to “Drive long-term sharehlder value.”
“Following an expected two years of double-digit top and bottom-line growth, I am as confident as ever in the power of our brands and operating model as we move, supportanding Capability Capability Capability We’ve Built, “Said Hrowitz. “In 2025, we will look to continue to continue sustainable, profitable growth the execution of our playbooks to win and retain customers Around the world. Balance sheet to grow operating income dollars and earnings per share at rates faster than sales. ”
That suggestion came True on Wedsday when Abercrombie Announced a new $ 1.3 billion share repurchase authorization and said it expects to spend $ 400 million on Stock Buybacks in 2025.
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