Here’s why investors are picking up shares of Abercrombie despite a disappointing outlook.
Transcript:
Despite beating Wall Street estimates for both its top and bottom lines in Q1, Abercrombie & Fitch slashed its profit outlook, and it’s blaming tariffs. The retailer says tariffs, as they’re currently imposed, will reduce its earnings by $50 million.
Abercrombie’s sales increased by about 8% year-over-year, bringing in $1.1 billion in its first quarter. In a statement, CFO Fran Horowitz said, “This was above our expectations and was supported by broad-based growth across our three regions.”
It was Abercrombie’s best first quarter — in terms of sales — in company history.
While the retailer says tariffs are largely to blame for the revised outlook, it also said it expects to see a drop in sales at its namesake stores. While sales at its Hollister stores outperformed in Q1, Abercrombie stores took a 4% sales hit, a stark change from its 31% increase a year ago.
Shares of Abercrombie were up over 25% as of the open of trading Wednesday, May 28.
That’ll do it for your daily briefing. From New York City, I’m Kelsey Barberio with TheStreet.
Subscribe |
Earn. Live. Invest. |
TheStreet Pro |
#abercrombie #retail #stocks #earningsseason
source
