Shares of Abercrombie & Fitch tanked more than 30% after the teen apparel retailer lowered its financial forecast, citing disappointing sales and rising costs.
Published: 2022-05-24 01:53 pm
Abercrombie & Fitch stock is tanking on grim financial outlook
nypost.com

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

The mall-based chain, which also owns Hollister and Gilly Hicks, slashed its sales outlook for the year, saying that revenues will remain flat or up 2% compared to its previous forecast of 2% to 4% growth.

Wall Street had been expecting 3.5% growth. The retailer reported a $14.8 million loss in the quarter ended April 30.

“Looking forward, we expect higher costs to remain a headwind through at least year-end,” said chief executive Fran Horowitz in a statement. “We will continue to manage expenses tightly,” she added.

The company blamed the loss on its increasing costs as inflation hits a 40-year high. It’s hardly alone as other major retailers including Walmart, Target and Kohl’s all flagged that consumers are spending more cautiously.

(image)
CEO, Fran Horowitz, said the company will be managing its expenses “tightly.”
Neilson Barnard

The slowdown in spending is contributing to A&Fs inventory buildup, the company said, pointing to a 45% increase compared to a year ago.

Overall sales at the New Albany, Ohio-based company rose by 4% in the quarter to $781 million while Hollister sales were down 3% compared to a year ago and Abercrombie & Fitch sales rose by 13%.

Horowitz, who has been CEO since 2017, was responsible for toning down the sexualized marketing at the company, spearheaded by her predecessor, Mike Jeffries. She’s ditched bare-chested male models, added plus-size models and leaned into the “body positivity” movement.

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

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

Read Full Story

ESPN pulls Rachel Nichols from all NBA programming, cancels ‘The Jump’

nypost.com - 10 months ago
Nichols was involved in a very public controversy with Maria Taylor during the NBA Finals.
Read More

Alex Rodriguez picked apart over ‘bizarre’ Wild Card broadcast

nypost.com - 9 months ago
Alex Rodriguez became the talk of Twitter during his wild-card broadcast on ESPN – and not for a good reason.
Read More

Tom Brady loves Phil Mickelson sipping wine out of Wanamaker Trophy

nypost.com - 1 year ago
Wine tastes a little different to Phil Mickelson after a big win.
Read More

Netflix’s ‘Kate’ criticized for ‘white girl on Asian killing spree’ premise

nypost.com - 10 months ago
The movie’s not even out, but some reviews are already in, and commentators want to know: Who greenlighted this?
Read More