Why Abercrombie & Fitch (ANF) Shares Are Sliding Today - Abercrombie & Fitch (NYSE:ANF)

Abercrombie & Fitch Co ANF reported a second-quarter FY22 sales decline of 7% year-on-year to $805.09 million, missing the consensus of $843.56 million.
Adjusted EPS of $(0.30) missed the consensus of $0.22.
U.S. sales declined 4% Y/Y while International sales declined 14%.
The gross profit margin compressed 730 basis points to 57.9%. The operating loss for the quarter was $(2.2) million compared to a profit of $114.7 million a year ago.
The company held $370 million in cash and equivalents as of July 30, 2022. Cash used in operating activities for the six months totaled $(259.7) million.
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"As the global macro environment deteriorated in the second quarter, we experienced a divergence in brand performance," said CEO Fran Horowitz.
Abercrombie brand sales rose 5%, while Hollister sales fell 15%, heavily impacted by inflation.
Outlook: Abercrombie expects FY22 sales to be down mid-single-digits (previous outlook: flat to up 2%), driven by an assumed ongoing inflationary impact on consumer demand.
It sees an FY22 operating margin of 1% - 3%, down from the previous outlook of 5 - 6%.
For Q3, ANF sees sales to be down high-single-digits.
Price Action: ANF shares are trading lower by 6.11% at $17.51 on the last check Thursday.
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Abercrombie & Fitch's Q2 Highlights: Earnings Miss, Inflation Hit Hollister Performance, Dismal Outlook & More