ORLANDO, FLORIDA– Lululemon and Abercrombie & Fitch It raised its fourth-quarter outlook on Monday after seeing a strong response from shoppers during the all-important holiday season.
Lululemon's new outlook was well received by investors, sending shares higher in early trading. But Abercrombie stock is down nearly 17% as investors wonder if that's even possible Its rapid growth It's coming to an end.
Lululemon now expects sales to grow 11% to 12% to between $3.56 billion and $3.58 billion, up from the previous range of $3.48 billion to $3.51 billion.
Excluding the additional fiscal week the company will have in the fourth quarter of 2024, Lululemon expects sales growth of 6% to 7%.
The company also raised its profit forecasts. Lululemon now expects fourth-quarter earnings per share to be between $5.81 and $5.85, compared to previous guidance of $5.56 to $5.64. It expects gross margins to grow by 0.3 percentage points after previously forecasting they would decline between 0.2 and 0.3 percentage points.
“During the holiday season, our guests responded well to our product offering, enabling us to increase our guidance for the fourth quarter,” Megan Frank, chief financial officer, said in a statement.
Meanwhile, Abercrombie also expects its holiday quarter to be slightly better than expected. The apparel company raised its net sales growth forecast to a range of 7% to 8%, compared to previous guidance of 5% to 7%.
Abercrombie now expects full-year sales to grow by 15%. It was previously expected that sales would rise between 14% and 15% during this period.
The forecast is a far cry from the huge numbers Abercrombie reported last year, when holiday sales jumped a staggering 21% compared to the same period last year.
Bullish investors in Abercrombie might say it makes sense to see the company's growth begin to slow as it matures and draws tougher comparisons compared to the same time last year, but after nearly two years of explosive stock growth, some may turn bearish.
However, Abercrombie's full-year sales guidance is close to what it put out last year, when revenue grew 16%.
In a press release, Abercrombie CEO Fran Horowitz noted that going forward, the company will focus more on enhancing profits than sales as it looks to “increase shareholder value over the long term.”
“After an expected two years of double-digit net profit and income growth, I am more confident than ever in the strength of our brands and operating model as we move forward, supported by the outstanding capabilities we have built,” Horowitz said. . “In 2025, we will look to continue sustainable, profitable growth by executing our playbook to win and retain customers around the world. Our goal is to leverage our healthy margin structure and balance sheet to grow operating income and earnings per share faster than sales.”
Retailers issued their guidance ahead of the annual ICR conference in Orlando where some prominent US retailers are expected to report early holiday results and meet investors and analysts about their performance. The conference brings together Wall Street's largest banks, law firms, private equity firms and investors, and is known to set the tone for consumer dealmaking and the performance of retailers at the start of the year.
Messiwhich is expected to present at the conference, also released early results but didn't have as good news to share as some of its competitors. The store now expects sales to be at or just below the previously issued range of $7.8 billion to $8.0 billion. Its shares fell more than 6% in early trading.
Urban Outfitters also released early holiday results and said net sales for the two months ended Dec. 31 were up 10% compared to the same period last year. Comparable retail sales rose 6%, driven by strong online sales.
Its namesake Urban banner saw comparable sales decline 4% as the chain continued to underperform Anthropologie and Free People, where comparable sales grew 10% and 9%, respectively.
Meanwhile, sales rose 55% at Urban's Nuuly rental service, driven by a 53% increase in average active subscribers.
Shares were down nearly 5% in early trading.
American eagle It also raised its forecast for the fourth quarter, saying it expects operating profit of about $135 million, up from its previous forecast of $125 million. Comparable sales for the quarter ended Jan. 4 rose in low single digits, compared with previous guidance of 1%, it said.
Shares fell about 4% in early trading.
Overall, the holiday shopping season was not expected to produce the high numbers that have become common in the wake of the COVID-19 pandemic. The National Retail Federation said it expects sales to grow between… 2.5% and 3.5%. When inflation is taken into account, so was real growth It is expected to be minimal.
However, some early readings have indicated that the holiday season may be a A little better Than expected.
Holiday season retail sales in the United States, excluding automobile sales, It increased by 3.8% year-on-year From November 1 to December 24, according to Mastercard SpendingPulse, which measures in-store and online sales across payment types.
