Abercrombie & Fitch lowers holiday quarter sales outlook

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A customer leaves the Abercrombie & Fitch store in San Francisco, California.

David Paul Morris | Bloomberg | Getty Images

Abercrombie & Fitch said on Monday it saw strong demand from consumers over the holiday season but didn’t have enough inventory to sell, especially on its Hollister and Gilly Hicks lines.

Even though Abercrombie lowered its guidance for fourth-quarter sales, the stock rose nearly 7% in extended trading. The stock closed the day down 2.5% at $32.35.

“We believe that if we have inventory on hand, our sales will be within our previous outlook,” CEO Fran Horowitz said in a release. “After the holiday, we experienced an acceleration in sales trends as inventories fell.”

Abercrombie said it expects fourth-quarter revenue to rise 4% to 6% from 2020 levels, or flat to a 2% decline from 2019. It had previously called for a 3% to 5% increase in sales in the holiday quarter compared to 2019. It did not provide earnings figures.

The company reported sales of $1.12 billion in 2020 and $1.19 billion in 2019.

Analysts have been calling for fourth-quarter earnings of $1.59 a share on 10.7% year-over-year sales growth, according to Refinitiv estimates.

The clothing retailer said it faced greater Covid-related impacts and restrictions, but did not elaborate on what those were. Earlier in the day, Lululemon said it expected its fourth-quarter sales to fall below the low end of its previous expectations as omicron has exacerbated staffing shortages and shortened store hours in recent weeks.

This year, Abercrombie expects sales to grow 19% to 20% from a year earlier. Analysts had been looking for a 21.2% increase.

The company also said it would cut its planned capital expenditures this year to between $90 million and $95 million from $100 million.

Find the full version of Abercrombie here.


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