Customers exit an Abercrombie & Fitch store in San Francisco, California.
David Paul Morris | Bloomberg | beautiful pictures
Abercrombie & Fitch said on Monday that it saw strong demand from consumers over the holidays but did not have enough inventory to sell, particularly at the Hollister and Gilly Hicks lines.
Shares rallied nearly 7% in extended trading after the release, although Abercrombie lowered its guidance for fourth-quarter sales. Shares closed for the day down 2.5% at $32.35.
“We believe that, if we have available inventory, we will sell within our previous outlook,” Chief Executive Fran Horowitz said in a press release. “After the holiday season, when inventory had landed, we experienced an accelerated sales trend.”
Abercrombie said it sees fourth-quarter revenue up 4% to 6% from 2020 levels, or down 2% from 2019. It had previously called for sales for the holiday quarter to grow 3% to 5% over 2019. It does not provide an earnings figure.
The company reported revenue of $1.12 billion in 2020 and $1.19 billion in 2019.
Analysts had called for fourth-quarter earnings of $1.59 per share, according to Refinitiv estimates, with sales up 10.7% year-over-year.
The clothing retailer said it has faced Covid-related impacts and restrictions without detailing exactly what that is. At the beginning of the day, Lululemon said its fourth-quarter sales are expected to went into the low results of the previous instruction due to lack of staff and shortened store hours has been aggravated in recent weeks by omicron.
During the year, Abercrombie saw sales increase from 19% to 20% compared to the previous year level. Analysts were looking for a 21.2% gain.
The company also said it is cutting its planned capital spending for the year to between $90 million and $95 million, down from $100 million.
Find the full release from Abercrombie here.
