Abercrombie & Fitch (ANF) reports Q1 2022 loss

Abercrombie & Fitch shares fell greater than 32% in premarket buying and selling Tuesday after the retailer reported an sudden loss for its fiscal first quarter, with freight and product prices weighing on gross sales.

Abercrombie additionally slashed its gross sales outlook for fiscal 2022, anticipating that financial headwinds will stay no less than by way of the top of the year. The information despatched shares of attire retailers American Eagle Outfitters and Urban Outfitters each down about 7% in premarket buying and selling.

Abercrombie now sees income flat to up 2%, in contrast with a previous forecast of two% to 4% progress. Analysts had been in search of a year-over-year improve of three.5%, in response to Refinitiv consensus estimates.

Chief Executive Officer Fran Horowitz mentioned in an announcement that the retailer will handle its “expenses tightly” and seek for alternatives to offset the upper logistics prices within the close to time period. She additionally mentioned Abercrombie plans to guard investments in advertising and marketing, technology and buyer experiences.

Abercrombie joins a rising checklist of shops, together with Walmart, Target and Kohl’s, which can be seeing earnings take successful as inflation hovers at a 40-year excessive. There are additionally issues that inventories are starting to pile up, following months of provide chain backlogs, proper as client demand for sure merchandise is waning. Businesses like Abercrombie could possibly be pressured to low cost objects to maneuver them off cabinets.

Here’s how Abercrombie did for the three-month period ended April 30, in contrast with what Wall Street was anticipating, primarily based on Refinitiv estimates:

• Loss per share: 27 cents adjusted vs. earnings of 8 cents anticipated
• Revenue: $813 million vs. $799 million anticipated

Abercrombie reported a internet loss for its fiscal first quarter of $14.8 million, or 32 cents per share, in contrast with internet earnings of $42.7 million, or 64 cents a share, a year earlier.

Excluding one-time objects, Abercrombie lost 27 cents per share. Analysts had anticipated the company to earn 8 cents a share throughout the quarter.

Sales grew 4% to $812.8 million from $781.4 million a year earlier. That was forward of expectations for $799 million.

Within that determine, gross sales at Abercrombie’s Hollister banner fell 3% year over year, whereas these of its namesake label rose 13%.

Abercrombie’s inventories totaled $563 million as of April 30, up 45% from year-ago ranges.

The retailer reduce its outlook for fiscal-year working margins to a variety of 5% to six%, down from a previous vary of seven% to eight%. Abercrombie mentioned the adjustment takes into consideration greater freight and uncooked materials prices, overseas forex and decrease gross sales as a result of an assumed inflationary influence on shoppers.

Beginning within the second quarter, Abercrombie mentioned it’s going to not present full-year or quarterly outlooks on gross revenue rate or working bills, “in response to volatility in freight and other costs.”

Abercrombie shares have fallen 23% year to this point, as of Monday’s market shut.