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Saturday, June 25, 2022

Abercrombie & Fitch stock is tanking on grim financial outlook

Shares of Abercrombie & Fitch fell more than 30% after the teen apparel retailer, once known for its skimpy-wearing models, lowered its financial forecast, citing disappointing sales and rising costs. .

The mall-based chain, which also owns Hollister and Gilly Hicks, downgraded its sales outlook for the year, saying revenue was flat, or up 2%, compared to its previous forecast of 2% to 4% growth. Will be

Wall Street was expecting growth of 3.5%. The retailer reported a loss of $14.8 million for the quarter ended April 30.

“Looking forward, we expect higher costs to remain a headwind, at least through the end of the year,” Chief Executive Fran Horowitz said in a statement. “We will continue to strictly manage expenses,” he added.

The company attributed the loss to its rising costs as inflation hit a 40-year high. It’s hardly alone that consumers are spending more carefully, as other major retailers including Walmart, Target and Kohl’s.

The CEO, Fran Horowitz, said the company would manage its expenses “tightly.”
Nielsen Bernard

Pointing to a 45% increase compared to a year ago, the company said the slowdown in spending is contributing to A&F’s inventory buildup.

The New Albany, Ohio-based company’s total sales rose 4% in the quarter to $781 million, while Hollister sales were down 3% from a year ago and Abercrombie & Fitch sales rose 13%.

Horowitz, who has been CEO since 2017, was responsible for reducing sexual marketing at the company, which was led by his predecessor, Mike Jeffries. She shunned bare-chested male models, added plus-size models, and leaned into the “body positivity” movement.

Jeffries embraced commercials featuring muscular, shirtless men and a quarterly magazine that some considered soft-porn.

In March, Netflix released a documentary called “White Hot: The Rise and Fall of Abercrombie & Fitch” in the late 1990s and early 2000s.

World Nation News Desk
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