After reporting a better-than-expected first quarter, American lifestyle retailer Abercrombie & Fitch Co.’s ANF management hinted at absorbing the tariff impact and announced plans to open 100 new “physical experiences” in 2025.
What Happened: Company CEO Fran Horowitz highlighted during the earnings call that the firm’s global supply chain and sourcing teams are working hard to drive efficiency across the supply chain.
“All of this work will have clear impact and, based on our current assumptions on tariffs, we are not planning broad-based ticket increases,” said Horowitz, hinting at tariff absorption without any price hikes.
The CFO, Robert Ball, also highlighted that the company was looking to mitigate its average unit retail price to avoid price increases.
“For AUR specifically, we are currently assuming no AUR mitigation in our outlook as we do not anticipate broad-based ticket price increases,” he said.
Adding that, “Net of expected mitigation efforts, the assumed tariffs carry a cost impact of around $50 million for 2025, impacting our full year operating margin outlook by 100 basis points.”
Furthermore, Horowitz highlighted that they expect to add 100 new “physical experiences” on the store’s front.
Ball added, “We expect to deliver around 100 new experiences, including 60 new stores and 40 right-sizes or remodels. We also expect to be net store openers, with our 60 new stores outpacing around 20 anticipated closures.”
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Why It Matters: Abercrombie & Fitch’s first quarter earnings of $1.59 per share beat estimates of $1.40, and its revenue rose 8% year-over-year to $1.10 billion, topping the consensus of $1.08 billion.
The company expects second-quarter net sales growth in the range of 3% to 5% and EPS of $2.10-$2.30 vs the consensus of $2.53.
It revised FY25 guidance for net sales growth from 3% to 5% to 3% to 6% and EPS from $10.40 to $11.40 to $9.50 to $10.50.
ANF shares surged 14.67% on Wednesday. It was 42.27% lower on a year-to-date basis and down 53.30% over a year.
Benzinga Edge Stock Rankings shows that ANF had a stronger price trend over the short term but a weaker trend over the medium and long term. Its momentum ranking was poor, and its value ranking was solid at the 85.77th percentile. The details of other metrics are available here.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, fell on Wednesday. The SPY was down 0.58% to $587.73, while the QQQ declined 0.44% to $518.91, according to Benzinga Pro data.
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