A person carries a bag from an Abercrombie & Fitch store on Fifth Avenue in New York City, February 27, 2017.
Andrew Kelly | Reuters
Abercrombie and Fitch Shares fell more than 32% in premarket trading on Tuesday after the retailer reported an unexpected loss in its fiscal first quarter, as shipping and product costs weighed on sales.
Abercrombie also lowered its sales forecast for fiscal year 2022, predicting that economic headwinds will remain at least through the end of the year. Shares of clothing retailers sent American Eagle Outfitters And Urban Outfitters Both are down about 7% in pre-market trading.
Abercrombie now sees revenue flat at 2%, compared to a previous forecast of 2% to 4% growth. Analysts were looking for a 3.5% annual increase, according to Refinitiv consensus estimates.
CEO Fran Horowitz said in a statement that the retailer will tightly manage its expenses and look for opportunities to offset higher logistics costs in the near term. She also said that Abercrombie plans to protect investments in marketing, technology and customer experiences.
Abercrombie joins a growing list of retailers, including WalmartAnd Goal And kohlwhich is witnessing a decline in profits as inflation hovers at the level Highest level in 40 years. There are also concerns that stocks are starting to build up, after months of supply chain buildup, just as consumer demand for certain products has waned. Companies like Abercrombie may have to discount items to take them off shelves.
Here’s how I did Abercrombie Three-month period ending April 30compared to what Wall Street was expecting, based on Refinitiv estimates:
- share loss: 27 cents adjusted to an expected 8 cent profit
- Revenues: $813 million versus the expected $799 million
Abercrombie reported a fiscal first-quarter net loss of $14.8 million, or 32 cents per share, compared to net income of $42.7 million, or 64 cents per share, a year earlier.
Excluding one-time items, Abercrombie lost 27 cents per share. Analysts had expected the company to earn 8 cents a share during the quarter.
Sales grew 4% to $812.8 million from $781.4 million in the previous year. That was before expectations of $799 million.
Within that number, sales at Abercrombie’s Hollister sign are down 3% year over year, while sales of the same name are up 13%.
Abercrombie inventories totaled $563 million on April 30, up 45% from last year’s levels.
The retailer lowered its full-year operating margin forecast to a range of 5% to 6%, down from the previous range of 7% to 8%. Abercrombie said the adjustment takes into account rising shipping costs, raw materials and foreign currency and lower sales due to the assumed inflationary impact on consumers.
Beginning in the second quarter, Abercrombie said it will not provide general or quarterly forecasts about gross profit or operating expenses, “in response to fluctuations in freight and other costs.”
Abercrombie shares are down 23% year-to-date, as of the market close on Monday.
“Pop culture junkie. Tv aficionado. Alcohol ninja. Total beer geek. Professional twitter maven.”