Brand de Mode Abercrombie & Fitch Advertising on a large-scale digital display panel outside the Outernet building on November 4, 2024 in London, the United Kingdom.
Mike Kemp | In pictures | Getty images
Actions of Abercrombie & Fitch Wednesday, even after the retailer reduced his prospects for profits due to prices, which should hit his business by $ 50 million.
The company now expects the full share of action to be between $ 9.50 and $ 10.50, compared to a previous range between $ 10.40 and $ 11.40. Analysts expected a profit of $ 10.33 per share, according to LSEG.
Abercrombie has also reduced its operating margin forecasts, another metric closely viewed by investors. It now expects its operating margin to be between 12.5% and 13.5%, against a previous range between 14% and 15%.
The company’s directives include the estimated impact of prices which are currently in force, including a price of 30% on imports from China and a 10% levy on dozens of other countries. It excludes other rates currently interrupted.
However, Abercrombie actions have climbed 25% in the market prior to the market after the company published results of the first quarter which beat Wall Street’s expectations on the upper lines and issued by the income which beat the forecasts. The stock had dropped almost 49% this year when entering Wednesday.
Here is how the clothing company worked in the first quarter compared to expectations, based on a survey of LSEG analysts:
- Profit by action: $ 1.59 against $ 1.39 expected
- Income: $ 1.10 billion against $ 1.07 billion expected
The company’s declared net profit for the period of three months which ended on May 3 was $ 80.4 million, or $ 1.59 per share, against $ 114 million, or $ 2.14 per share, a year earlier.
Sales reached $ 1.10 billion, up approximately 8%, compared to $ 1.02 billion a year earlier. In a press release, Abercrombie said sales have reached a record for the first tax quarter.
“It was above our expectations and was supported by wide growth in our three regions,” CEO Fran Horowitz said in a statement. “Hollister Brands led performance with growth of 22%, achieving its best net sales in the first quarter, while net sales of Abercrombie brands fell 4% compared to sales growth of 31% in 2024.”
Beyond its prospects for profits, Abercrombie has slightly increased its sales advice in full year and now expects revenues to increase between 3% and 6%, against a previous range between 3% and 5%. It is largely ahead of the expectations of 3.3% growth, according to LSEG.
For its current quarter, Abercrombie provides that sales will increase between 3% and 5%, which meets expectations of 4.7% growth up to LSEG. The company expects its operating room to be between 12%and 13%, below expectations of 14.1%, according to Streetaccount. It provides that profit per share will be between $ 2.10 and $ 2.30, below $ 2.50 expectations.
The weak directives of Abercrombie largely reflect the way in which the prices will reduce its profits, but its sales should also take a hit because it is a slowdown in its homonymous banner. The eponymous chain of Abercrombie has fueled its historic return in recent years, but sales have dropped 4% to the brand in the first quarter, after growth of 31% of the previous year.
Meanwhile, comparable sales for the Abercrombie brand plunged 10%.
The slowdown in sales could simply be normalization after the supercharged growth of Abercrombie, but they could also be a sign that the company loses market share.
The Hollister brand of the company has worked much better than its homonymous banner. During the quarter, Hollister sales jumped 22%, while comparable sales increased by 23%. The teenager -focused chain should generate the growth of upcoming Abercrombie.
