Abercrombie & Fitch Co. shares fell after holiday sales weren’t robust enough for the company to lift its sales guidance.
The New Albany, Ohio-based company now expects fourth-quarter sales growth of around 5 percent, compared with a prior range of 4 percent to 6 percent. Full-year sales growth is expected to be at least 6 percent, compared with a prior range of 6 percent-7 percent, the company said in a statement.
The update comes after the trendy retailer raised the low end of its annual forecast two months ago, boosted by strong back-to-school demand. While the company said holiday sales were “strong” at both its Hollister and Abercrombie brands, Monday’s update suggests that growth is moderating after years of momentum.
Shares of Abercrombie sank as much as 17 percent in premarket trading in New York on Monday. The shares had jumped 90 percent since the company reported strong third-quarter results in November.
Teen brands appeared to be the big winners on Black Friday as discerning shoppers focused on trends and value. Hollister has drawn young shoppers with campaigns like its collaboration with Taco Bell for Cyber Monday that tapped into Y2K retro style.
The namesake brand, Abercrombie, was expected to benefit from “trend-right drops, lean inventories, higher price points and bold marketing,” Bloomberg Intelligence analyst Mary Ross Gilbert said in a November note.
Abercrombie’s update comes ahead of the ICR Conference taking place this week in Orlando. The company is expected to report full fourth-quarter results around March 5.
By Dina Katgara
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