A man carries a bag from the Abercrombie & Fitch store on Fifth Avenue in New York City, February 27, 2017.

Andrew Kelly | Reuters

Shares of Abercrombie & Fitch fell more than 25% at the start of trading on Tuesday after a retailer reported an unexpected loss in the first fiscal quarter and freight and product costs affected sales.

Abercrombie has also lowered its sales forecasts for fiscal year 2022, hoping that economic hurdles will remain at least until the end of the year. The news led to the fact that shares of clothing retailers American Eagle Outfitters and Urban Outfitters fell about 7% in the previous trade.

Abercrombie now sees revenue of 2% over its previous growth forecast of 2% to 4%. According to Refinitiv consensus estimates, analysts expected an increase of 3.5% over last year.

CEO Fran Horowitz said the retailer would tightly manage its “costs” and look for opportunities to offset high logistics costs in the near future. She also said Abercrombie plans to protect investments in marketing, technology and customer experience.

Abercrombie joins a growing list of retailers, including Walmart, Target and Kohl’s, that see profits when inflation is at its 40-year high. There are also fears that stocks are starting to accumulate after months of stagnation in supply chains, as consumer demand for some products is declining. Businesses like Abercrombie may be forced to drop goods to take them off the shelves.

Here’s how Abercrombie did for the three-month period that ended April 30, compared to what Wall Street expected, based on Refinitiv estimates:

  • Loss per share: 27 cents adjusted for expected earnings of 8 cents
  • Income: $ 813 million versus the expected $ 799 million

Abercrombie reported a net loss for the first fiscal quarter of $ 14.8 million, or 32 cents a share, compared to net income of $ 42.7 million, or 64 cents a share, a year earlier.

Excluding disposables, Abercrombie lost 27 cents a share. Analysts expected the company to receive 8 cents a share for the quarter.

Sales rose 4% to $ 812.8 million from $ 781.4 million a year earlier. This was ahead of expectations of $ 799 million.

As part of this figure, sales of the banner Abercrombie Hollister decreased by 3% compared to last year, while sales of the eponymous label increased by 13%.

Abercrombie’s stock on April 30 was $ 563 million, up 45% from last year.

The retailer reduced its operating margin forecasts for the fiscal year to a range of 5% to 6% compared to the previous range of 7% to 8%. Abercrombie said the adjustment takes into account higher costs for freight and raw materials, foreign exchange and lower sales due to the expected impact of inflation on consumers.

Beginning in the second quarter, Abercrombie said it would no longer give forecasts for gross profit or operating expenses for the full year and quarter “in response to volatility in freight and other expenses”.

Shares of Abercrombie fell 28% to $ 19.14 in Tuesday morning trading. As of Monday’s closing, shares have fallen 23% since the beginning of the year.

Source by [author_name]

Previous articleThe WHO claims that the outbreak of monkeypox is “contained”, as the confirmed case reached 131
Next articleDfT signs a deal to control the finances of transport companies