ORLANDO, Fla. — A major retailer posted early-holiday earnings results that mostly beat expectations, but its stock price fell after Wall Street was unimpressed.
lululemon, Abercrombie & Fitch and american eagle The company raised its fourth-quarter outlook on Monday after a strong response from shoppers during the all-important holiday season. urban outfitters Although the holiday season also showed steady growth, Macy’s He said the key quarter was worse than expected.
Still, stock prices for all of these companies fell early Monday, with many dropping more than 5%. Abercrombie’s stock fell the most, falling about 20%, as investors feared the company’s meteoric rise was coming to an end.
Lululemon now expects sales to increase 11% to 12% to $3.56 billion to $3.58 billion, up from a previous range of $3.48 billion to $3.51 billion.
Excluding an additional fiscal week in the fourth quarter of 2024, Lululemon expects sales to increase 6% to 7%.
The company also raised its profit outlook. Lululemon now expects fourth-quarter earnings per share of $5.81 to $5.85, compared with its previous guidance of $5.56 to $5.64. Gross profit margin is now expected to increase by 0.3 percentage points, compared to previous expectations of a decline of 0.2 to 0.3 percentage points.
“Guests responded well to our product offerings during the holiday season, allowing us to raise our outlook for the fourth quarter,” Finance Director Meghan Frank said in a statement.
Meanwhile, Abercrombie also expects the holiday quarter to be slightly better than expected. The company slightly raised its net sales growth outlook to a range of 7% to 8% from its previous outlook of 5% to 7%.
Abercrombie now expects full-year sales to increase 15%. The company had previously expected sales to rise 14-15% in the same period.
This outlook is a far cry from the blockbuster numbers Abercrombie posted last year, with holiday sales up an astonishing 21% year-over-year.
Investors who are bullish on Abercrombie would say it’s natural for growth to start to slow as the company matures and year-over-year comparisons become tougher, but after nearly two years of explosive stock growth, , some investors may turn bearish.
Still, Abercrombie’s full-year sales outlook is similar to last year’s outlook, when sales rose 16%.
Abercrombie CEO Fran Horowitz said in a news release that the company aims to “improve long-term shareholder value” and suggested the company will now focus on growing profits rather than sales.
“We expect two years of double-digit revenue and bottom-line growth, and we continue to build on the strength of our brand and operating model, supported by the exceptional capabilities we have built,” said Horowitz. We are moving forward with confidence.” . “In 2025, we aim to continue sustainable and profitable growth through the execution of our strategy to acquire and retain customers around the world. Our goal is to achieve a healthy profit structure and It’s about leveraging the balance sheet to grow operating income and earnings per share faster than sales. ”
The retailer released the guidance ahead of the annual ICR conference in Orlando. The conference is expected to see some of America’s most prominent retailers present their results early in the holiday season and meet with investors and analysts to discuss their results. The conference brings together Wall Street’s biggest banks, law firms, private equity firms and investors and is known for setting the tone for consumer trading and retail performance at the start of the year.
Macy’s, which is scheduled to present at the conference, also released early financial results, but didn’t have any good news to share like some of its competitors. The department store now expects sales to be in the range of $7.8 billion to $8 billion, or slightly below. The company’s shares fell more than 6% in intraday trading.
Urban Outfitters also released its financial results for the start of the holiday season, reporting a 10% increase in net sales for the two months ended Dec. 31 compared to the same period last year. Comparable retail sales rose 6%, driven by strong online sales.
Urban’s eponymous banner saw comparable sales decline 4% and rise 10% and 9%, respectively, as the chain continued to underperform Anthropologie and Free People.
Meanwhile, Urban’s rental service Nuuly saw a 55% increase in revenue due to a 53% increase in average active subscribers.
The stock fell more than 6% in intraday trading.
American Eagle also raised its fourth-quarter outlook, saying it now expects operating income to be about $135 million, up from its previous estimate of $125 million. Comparable sales for the quarter ended January 4 increased by low single digits, compared with the previously expected 1% increase.
However, total revenue will be down about 5% because American Eagle’s fiscal calendar has one week less than the same period last year, the company said. This change in timing is expected to impact sales by $85 million in the fourth quarter and $60 million for the full year.
The stock price fell about 4%.
Overall, the holiday season was not expected to generate the kind of explosive numbers that have become common in the aftermath of the COVID-19 pandemic. The National Retail Federation said it expects sales to rise 2.5% to 3.5%. Taking inflation into account, real growth was expected to be minimal.
Still, some early findings suggest the holiday season may turn out to be a little better than expected.
According to Mastercard Spending Pulse, which measures in-store and online sales by payment method, U.S. holiday retail sales, excluding auto sales, rose from Nov. 1 to Dec. 24 compared to the same period last year. It increased by 3.8% compared to the previous year.
