Abercrombie & Fitch has seen remarkable growth over the past two years, but the retailer’s future projections have fallen short of investor expectations, sending shares down by 15%.
The company forecasts that sales in fiscal 2025 will rise by just 3% to 5%, a significant drop from the anticipated 6.8% growth, according to London Stock Exchange Group (LSEG).
Additionally, expected earnings per share for the current quarter range from $1.25 to $1.45, below Wall Street’s $1.97 forecast.
The slowdown is especially evident in Abercrombie’s core brand, which had been a key driver of the company’s previous success.
Sales for Abercrombie grew only 2% in the most recent quarter, while its sister brand, Hollister, saw a 16% increase.
CEO Fran Horowitz commented on the divergence on a call with analysts: “Last year we did have a bit of a flawless transition into spring, and this year it’s a bit more normalized.
“[The full company’s sales are] positive for the month of February, seeing a little bit of a difference between the brands. Hollister came in very strong off of a very, very strong Q4 and Abercrombie is a bit negative.”
Despite this, Abercrombie narrowly beat analyst expectations in its fiscal fourth quarter, reporting earnings per share of $3.57, ahead of the expected $3.54.
However, its operating margin projections for the first quarter are well below market expectations, adding to concerns about the company’s ability to maintain its momentum.
The company also faces broader challenges, including cautious consumer sentiment and potential impacts from geopolitical issues.
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