Abercrombie & Fitch Co (NYSE: ANF) shares are down nearly 20% on Wednesday after the lifestyle retailer reported its fiscal fourth-quarter results that came in shy of Wall Street estimates.
Highlights from Abercrombie & Fitch Q4 earnings report
Net income printed at $65.5 million versus the year-ago figure of $82.4 million.
Per-share earnings stood at $1.12 – a decline from last year’s $1.27.
Adjusted EPS of $1.14 was below the FactSet consensus for $1.27.
Sales were up 3.5% YoY but missed experts’ forecast by $22 million.
CEO Horowitz blames inventory issues for weak results
In the earnings press release, CEO Fran Horowitz blamed inventory issues for the dovish results but said the same was unlikely to replicate in the current quarter.
“Following inventory receipt delays that impacted the peak holiday selling period, sales trends initially improved as product began to arrive. While mid-January was impacted by the Omicron surge, sales rebounded in late January as cases fell and new assortments set.”
Last month, UBS downgraded ANF to “neutral” citing inflationary pressures. The investment bank slashed its price target from $68 to $37 that still represents a 25% upside from here, including today’s price action.
What Abercrombie & Fitch expects for the current quarter
For the fiscal first quarter, Abercrombie forecasts low-single-digit growth in sales. Its full-year outlook for sales growth stands at 2.0% to 4.0%. In comparison, analysts had called for a 2.4% sales growth this quarter and 3.0% for the year as a whole. Horowitz added:
Looking ahead, we’ll continue to thoughtfully manage the business to support long-term growth leveraging our investments in systems, process, and tools across digital, technology, data and analytics. We look forward to sharing more details on our three-year plan at our June Investor Day.
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