Abercrombie Q4 Earnings Beat Overshadowed By Cautious Q1 Outlook, Stock Plunges

Abercrombie & Fitch Company ANF shares are trading lower in the morning session on Wednesday.

The company reported fourth-quarter adjusted earnings per share of $3.57, beating the street view of $3.52. Quarterly sales of $1.585 billion outpaced the analyst consensus estimate of $1.563 billion.

The company reported net sales growth of 9%, with comparable sales growth of 14%.

Abercrombie brand sales gained 2% to $772.67 million, while Hollister brand jumped 16% year over year to $812.247 million.

The company reported operating income of $256 million, as compared to operating income of $223 million last year. Operating margin as a percent of sales increased to 16.2% from 15.3% last year.

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Fran Horowitz, CEO, said, “We entered the fiscal year with the goal of achieving sustainable, profitable growth..”

“We grew net sales 16% to nearly $5 billion while expanding operating margin to 15%, with operating income and EPS growth of 53% and 72%, respectively,” Horowitz added.

As of February 1, the company had cash and equivalents of $773 million, marketable securities of $116 million, and inventories of $575 million, an increase of approximately 22% over last year.

Share Repurchase Authorization: The company also announced that it has authorized a new $1.3 billion stock repurchase program, which replaces the company’s prior share repurchase program that was authorized in 2021. 

Outlook: The company expects first-quarter net sales growth in the range of 4% to 6%, while FY25 growth in the range of 3% to 5%.

Abercrombie & Fitch sees first-quarter EPS in the range of $1.25 to $1.45 versus the $2.01 estimate, and full-year EPS in the range of $10.40 to $11.40 versus $10.90 estimate.

The company sees operating margins in the range of 8% to 9% for the first quarter and 14% to 15% for the full year, including the estimated impact of the tariffs announced in February 2025 on goods imported from China, Mexico, and Canada into the U.S.

Price Action: ANF shares are trading lower by 15.8% to $80.97 at last check Wednesday.

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