Abercrombie & Fitch Shares Tumble Premarket After Reporting First-Quarter Earnings
May 24, 2022 By MarketDepth
Abercrombie & Fitch shares tumbled over 32% during premarket trading Tuesday after reporting its first-quarter earnings miss as both supply chain and product costs affected sales. Consequently, the retailer cut its annual forecasts for sales and margins.
Higher Earnings Loss
The American lifestyle retailer reported an earnings loss of USD0.27 a share, compared to the expected earnings of USD0.08 a share. Revenue amounted to USD813 Million, higher than analysts anticipated USD799 Million. Furthermore, the company reported a net loss of USD14.8 Million, compared to the previous year’s net income of USD42.7 Million.
“First quarter net sales exceeded expectations, rising 4% to $813 million, our highest first quarter level since 2014. Results were driven by ongoing strength at the Abercrombie & Fitch brand, where global sales were above plan. Net sales at Hollister were in line with expectations. By region, the U.S. continued to outperform, EMEA net sales returned to positive territory, and APAC was impacted by COVID lockdowns in China. We continued to reduce our promotional activity, contributing to our eighth consecutive quarter of AUR improvement. This was more than offset by higher-than-expected freight and product costs.”Chief Executive Officer, Fran Horowitz
The company cut its full-year operating margins outlook and now expects anywhere between 5% to 6%, down from the previous range of 7% to 8%.
“Looking forward, we expect higher costs to remain a headwind through at least year-end. We expect freight relief in the fourth quarter as our anniversary increased air usage last year due to the Vietnam shutdown. We will continue to manage expenses tightly and are committed to finding opportunities to offset these costs while protecting strategic investments in marketing, technology and our customer experience, which should drive sustained, long-term sales growth.”Chief Executive Officer, Fran Horowitz
Abercrombie shares have plummeted 23% throughout the year and have a current market cap of USD971.49 Million.