Shoppers exit an Abercrombie & Fitch store in San Francisco, California.
David Paul Morris | Bloomberg | Getty Images
Abercrombie & Fitch said Monday that there is strong consumer demand over the holidays, but it has insufficient inventory to sell, especially on the Hollister and Gilly Hicks lines.
The stock rose nearly 7% in extended trading after the publication, despite Abercrombie downgrading its fourth-quarter sales forecast. The stock closed down 2.5% at $ 32.35.
“We believe that if we had stock in stock, we would have generated sales within our previous forecast range,” CEO Fran Horowitz said in a press release. “After the holidays, when stocks were replenished, we noticed an acceleration in the sales trend.”
Abercrombie said it expects fourth-quarter revenue growth of 4-6% from 2020, or 2% lower than 2019. The company previously called for a 3-5% increase in sales for the holiday quarter over 2019. He did not provide income data.
The company reported sales of $ 1.12 billion in 2020 and $ 1.19 billion in 2019.
Refinitiv estimated that analysts had forecast fourth-quarter earnings of $ 1.59 per share and sales were up 10.7% year over year.
The apparel retailer said it faced increased exposure and restrictions related to Covid, without specifying what exactly. Lululemon said earlier in the day that its fourth-quarter sales are expected to fall below the previous forecast due to staff shortages and cut store opening hours, which have been exacerbated by omicron in recent weeks.
Abercrombie is forecasting 19-20% sales growth this year over last year. Analysts had expected a 21.2% rise.
The company also said it was cutting its planned capital expenditures for the year to $ 90–95 million from $ 100 million.
Find the complete release from Abercrombie here…