Abercrombie Revenue-Growth Forecast Shows Signs of Slowing

Abercrombie & Fitch Co. provided a full-year revenue-growth forecast that might be a slowdown from the prior yr, suggesting that the attire retailer’s momentum may lastly be flagging after a torrid run.

The corporate, which is especially common amongst millennials and Gen-Z, has skilled 5 consecutive quarters of income development, outperforming different US attire corporations resembling Hole Inc., which have struggled in recent times to maintain prospects coming again. CEO Fran Horowitz has credited Abercrombie’s current development to energy in classes like clothes, tailor-made pants and activewear.

The New Albany, Ohio-based firm stated it expects full-year internet gross sales to rise 4 p.c to six p.c, roughly in keeping with analysts’ estimates however down from 21 p.c development within the prior fiscal yr.

The shares have been down 3.8 p.c at 9:46 AM in New York. Within the 12 months by means of Tuesday’s shut, the inventory had risen greater than 400 p.c.

That’s a notable turnaround for a corporation that was buying and selling at its lowest share value on document 4 years in the past. The corporate has invested closely in e-commerce, closed underperforming shops and experimented with new retailer codecs to higher serve shifting client habits.

“Our playbook is working — we’ve been capable of actually broaden the addressable marketplace for Abercrombie grownup,” Horowitz stated on a name with analysts.

Horowitz stated the corporate has turn into a vacation spot for merchandise past the denims and T-shirts it was initially recognized for. For instance, the corporate will launch a wedding-guest store this week particularly for formal events, she stated.

“Frankly, there’s no end line,” Horowitz stated of the corporate’s development potential.

Abercrombie reported earnings of $2.97 a share for the quarter ended Feb. 3, beating analysts’ estimate of $2.82.

Comparable gross sales on the Abercrombie namesake model surged 28 p.c within the fourth quarter, which incorporates the important thing vacation season. At Hollister, the corporate’s model that caters to teenagers and has been struggling to develop, same-store gross sales rose 6 p.c.

By Olivia Rockeman

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Why Abercrombie & Fitch and American Eagle Are Racing Ahead of the Competition

The chains are exceeding gross sales expectations in a uneven market by giving younger buyers the merchandise they need, in simply the correct quantity.