In This Story Despite a positive second-quarter earnings report, Abercrombie & Fitch ANF stock took a more than 17% dive Wednesday after the CEO warned of an “increasingly uncertain environment.” Abercrombie said in its Wednesday earnings report that it brought in $1.13 billion in revenue, exceeding analysts’ $1.1 billion forecast.
It also reported a $2.50 per share profit, above the $2.22 that Wall Street predicted.
But CEO Fran Horowitz worried investors when she said the rest of the year might prove more challenging.
“We delivered a strong first half of the year, and we are increasing our full-year outlook.
Although we continue to operate in an increasingly uncertain environment, we remain steadfast in executing our global playbook and maintaining discipline over inventory and expenses,” Horowitz said, according to CNBC.
Horowitz predicted that sales growth might slow as the year comes to an end and Abercrombie’s profitability will decline, Yahoo Finance reported.
The retailer placed its new 2024 sales forecast at $4.3 billion, below the previous $4.8 billion that analysts hoped to see.
The company also predicted a 14.5% profit margin, down a percentage point from its second quarter, Yahoo said.
Abercrombie shares almost quadrupled in 2023 and surged 89% before the Wednesday report.
“While the market may have been looking for a stronger guidance lift for the year, given momentum across the business, we see a beat and raise as impressive given a moderating top line outlook in response to a choppy macro environment across many of Abercrombie’s specialty retail peers,” Dana Telsey, an analyst at Telsey Advisory Group, told Reuters.
In This Tale.
Abercrombie and Fitch ANF stock fell more than 17 percent on Wednesday despite the company’s second-quarter earnings report being positive. The CEO’s warning about an “increasingly uncertain environment” caused the stock to plummet. “.
In its Wednesday earnings release, Abercrombie reported $1.13 billion in revenue, above the $1.11 billion analysts had predicted. It also declared a profit per share of $2.50, surpassing Wall Street’s prediction of $2.22. However, investors were alarmed when CEO Fran Horowitz hinted that the remainder of the year might be more difficult.
“We exceeded our full-year projection after a fantastic first half of the year. We are steadfast in following our global playbook and upholding discipline over inventory and expenses, even though we continue to operate in an increasingly uncertain environment,” Horowitz stated, as reported by CNBC.
Horowitz forecast that Abercrombie’s profitability would drop and that sales growth might slow as the year draws to a close, according to Yahoo Finance.
The retailer revised its sales projection for 2024 to $4.3 billion, less than the $4.8 billion analysts had previously predicted. Additionally, according to Yahoo, the company projected a profit margin of 14.5 percent, which is a percentage point lower than its second quarter results.
Before the report on Wednesday, Abercrombie shares had increased by 89% and nearly quadrupled in 2023.
According to Dana Telsey, an analyst at Telsey Advisory Group, “we see a beat and raise as impressive given a moderating top line outlook in response to a choppy macro environment across many of Abercrombie’s specialty retail peers,” Reuters reported. “While the market may have been looking for a stronger guidance lift for the year, given momentum across the business.”.
