Shares of Abercrombie & Fitch are tanking after it launched its quarterly outcomes on Tuesday.
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Shares of Abercrombie & Fitch plunged greater than 30% after the teenager attire retailer, as soon as identified for its skimpily clad fashions, lowered its monetary forecast, citing disappointing gross sales and rising prices.
The mall-based chain, which additionally owns Hollister and Gilly Hicks, slashed its gross sales outlook for the 12 months, saying that revenues will stay flat or up 2% in comparison with its earlier forecast of two% to 4% development.
Wall Road had been anticipating 3.5% development. The retailer reported a $14.8 million loss within the quarter ended April 30.
“Wanting ahead, we anticipate larger prices to stay a headwind by at the very least year-end,” mentioned chief government Fran Horowitz in a press release. “We are going to proceed to handle bills tightly,” she added.
The corporate blamed the loss on its growing prices as inflation hits a 40-year excessive. It’s hardly alone as different main retailers together with Walmart, Goal and Kohl’s all flagged that buyers are spending extra cautiously.
The slowdown in spending is contributing to A&Fs stock buildup, the corporate mentioned, pointing to a forty five% improve in comparison with a 12 months in the past.
Total gross sales on the New Albany, Ohio-based firm rose by 4% within the quarter to $781 million whereas Hollister gross sales have been down 3% in comparison with a 12 months in the past and Abercrombie & Fitch gross sales rose by 13%.
Horowitz, who has been CEO since 2017, was chargeable for firming down the sexualized advertising on the firm, spearheaded by her predecessor, Mike Jeffries. She’s ditched bare-chested male fashions, added plus-size fashions and leaned into the “physique positivity” motion.
Jeffries embraced adverts that includes beefy, shirtless males and a quarterly journal that some thought-about soft-porn.
In March, Netflix launched a documentary about that period within the late Nineteen Nineties and early 2000’s referred to as “White Sizzling: The Rise and Fall of Abercrombie & Fitch.”
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