Lululemon and Abercrombie release holiday sales figures for early 2024

ORLANDO, Florida — Lululemon And Abercrombie & Fitch On Monday, they raised their outlook for the fourth quarter after seeing a strong response from buyers during the all-important holiday season.

Lululemon’s new outlook was well received by investors, sending shares up about 3% in premarket trading. But Abercrombie’s shares have fallen about 8%, with investors wondering whether its rapid growth is coming to an end.

Lululemon now expects sales growth of between 11 and 12 percent, to $3.56 billion to $3.58 billion, up from a previous range of $3.48 billion to $3.51 billion.

Excluding the additional fiscal week the company will have in the fourth quarter of 2024, Lululemon expects sales growth of between 6% and 7%.

The company also raised its earnings outlook. Lululemon now expects fourth-quarter earnings per share of between $5.81 and $5.85, compared to previous guidance of between $5.56 and $5.64. It expects gross margins to increase by 0.3 percentage points, compared to previously forecasting a decline of between 0.2 and 0.3 percentage points.

“During the holiday season, our guests responded well to our product offerings, allowing us to increase our guidance for the fourth quarter,” Chief Financial Officer Meghan Frank said in a statement.

Meanwhile, Abercrombie also expects its holiday quarter to be slightly better than expected. The clothing company raised its outlook for net sales growth to a range of between 7% and 8%, compared to previous forecasts of between 5% and 7%.

Abercrombie now expects 15% sales growth for the full year. It previously expected an increase in sales of between 14 and 15% over the period.

The outlook is a far cry from the blockbuster numbers Abercrombie posted last year, when holiday sales jumped 21% from the year-ago period.

Investors bullish on Abercrombie would say it makes sense to see the company’s growth start to slow as it matures and comparisons are tougher to last year’s period, but after about two years of explosive growth in stocks, some may turn bearish.

Still, Abercrombie’s sales forecast for the full year is close to what it released last year, when revenue rose 16%.

In a press release, Abercrombie CEO Fran Horowitz said that going forward, the company will focus more on growing profits than sales as it seeks to “generate long-term value.” term for shareholders.

“After two anticipated years of double-digit revenue and bottom line growth, I am more confident than ever in the power of our brands and operating model as we move forward, supported by the exceptional capabilities we we built,” Horowitz said. . “In 2025, we will seek to continue sustainable and profitable growth through the execution of our strategies to win and retain customers around the world. Our goal is to leverage our healthy margin structure and balance sheet to increase operating profit and earnings per share to a high level. rates faster than sales.

Retailers released their forecasts ahead of ICR’s annual conference in Orlando, where some of the largest U.S. retailers are expected to announce their first holiday results and meet with investors and analysts about their performance. The conference brings together Wall Street’s largest banks, law firms, private equity firms and investors and is known for setting the tone for consumer deal-making and retailer performance in the early days of the year. year.

Macy’swhich is expected to present at the conference, also published its first results but did not have good news to share like some of its competitors. The department store now expects sales to be at or slightly below the previously reported range of $7.8 billion to $8.0 billion. Shares fell more than 3% in premarket trading.

Urban Outfitters also reported its first holiday results and said its net sales for the two months ended Dec. 31 were up 10% compared to the same period last year. Comparable sales in the retail segment increased 6%, driven by strong online sales.

Urban’s namesake banner saw comparable sales fall 4%, with the chain continuing to underperform Anthropologie and Free People, where comparable sales increased 10% and 9%, respectively.

Meanwhile, sales of Urban’s Nuuly rental service soared 55%, driven by a 53% increase in average active subscribers.

Shares rose slightly in premarket trading.

Overall, the holiday shopping season is not expected to produce the explosive numbers that have become common in the wake of the Covid-19 pandemic. The National Retail Federation said it expects sales growth of between 2.5% and 3.5%. If inflation is taken into account, real growth is expected to be minimal.

Still, some early readings indicated the holiday season might be a little better than expected.

U.S. holiday season retail sales, excluding auto sales, increased 3.8% year over year between Nov. 1 and Dec. 24, according to Mastercard SendingPulse, which measures in-store and online sales for all payment types.