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Shares Abercrombie & Fitch He was born on Wednesday, even after the retailer reduced the income forecast from the tariffs that are expected to reach his business by $ 50 million.
The company is now expected to be $ 9.50 to $ 10.50 for the share, which is $ 10.40 to $ 11.40 compared to the previous range. Analysts expected a $ 10.33 profit for the share, LSEG reports.
Abercrombie also reduced its operating forecast, another attentive metric of investors. It is now expected that its operating margin will be from 12.5% to 13.5%, which is from 14% to 15% compared to the previous range.
The company management includes the estimated exposure to tariffs currently operating, including 30% import tariff from China and 10% collection of goods from dozens of other countries. It eliminates other stops.
However, Abercrombie shares opened 27% higher after the company made the results in the first quarter, which won Wall Street’s expectations over the upper and lower line and made recommendations on the income that won the forecasts. This year the shares fell by almost 49%.
Here’s how the clothing company performed in the first quarter compared to the expectations based on LSEG analysts:
- Profit per share: $ 1.59 against $ 1.39 expected
- Income: Is expected to $ 1.10 billion against $ 1.07 billion
The company’s net income for the three -month period, which ended on May 3, amounted to $ 80.4 million, or $ 1.59 per share, compared to $ 114 million, or $ 2.14 per share a year earlier.
Sales have increased to $ 1.10 billion, which is about $ 8% compared to $ 1.02 billion a year earlier. In the news release, Abercrombie said the sales had reached a record high for the first quarter.
“It was above our expectations and was supported by wide growth in three of our regions,” said the CEO Franz Goriwitz in a statement. “Brands Hollister led productivity with 22% growth, reaching the best in the history of the first quarter of clean sales, while the net sales of Abercrombie Brands decreased by 4% to 31% sales growth in 2024.”
In addition to profit prospects, Abercrombie has raised its full years, and now expects the profit to grow from 3% to 6%, which is from 3% to 5% compared to the previous range. This is largely ahead of 3.3%growth expectations, LSEG reports.
According to LSEG, Abercrombie suggests that sales will increase from 3% to 5%, which is up to 4.7% growth in high levels, LSEG reports. The company expects that its operating margin will be 12%to 13%, lower than the expectations of 14.1%, according to Streetaccount. He believes that the stock profit will be from $ 2.10 to $ 2.30, below the $ 2.50 expectation.
On a call with analysts, finance chief Robert Ball said Abekromb was expected that 70 million dollars had hit the tariffs, but to reduce it to $ 50 million by mitigating the consequences. To compensate for duties and maintain profits, the company does not plan a “wide” increase in prices, But works with its suppliers to offset the costs and seek diversification of its network.
“The more diversified we are, the faster we can be,” the score said in an interview with CNBC. “We are looking for a reduction in costs … in this business, but we do this with a very clean look at the long -term business investment because we just see a ton of opportunities for these brands in the world and for a long time. So it is a very careful approach.”
Abercrombie received about 30% of its products from China before the pandemic, but this number is now in low single numbers, the score said. Its largest trading partners are now Vietnam, Cambodia and India, which will face tariffs between 26% and 49% at the April proposal of Donald Trump.
Currently, these tariffs are declining to 10%, and Trump is negotiating trading transactions with each nation. When asked in an interview with CNBC, when Abercrombie implemented a wide price increase, if these tariffs enter into force, Gauvitz refused to answer.
The weak indications of Abercrombus are largely reflecting how the tariffs will reduce profits, but it is expected that its sales will lead to the hit as it claims slowing on its names. The Abercrombie network of the same name has fueled its historic return over the past few years, but sales in the first quarter decreased by 4%, after a 31% increase in the year. Meanwhile, comparable sales for the Abercrombie brand were immersed by 10%.
At the call with analysts, Haravitz acknowledged that Abekromb’s speech did not live up to expectations. She He accused him of winter inventory that the company was to be reduced for sale, which came at a time when consumers are usually distracted from new clothes after the festive trading season. This discount affected the sale and profitability of Abercrombie for the quarter.
The company is also conducting a strong launch of its wedding store during the year. The launch of the product included dresses and outfits for all cases related to the wedding of the modern, such as a rehearsal dinner, in the morning after lunch and a bachelor.
“Another piece was against, frankly, impressive launch of the wedding store, which we just didn’t make,” said Haravitz. “So we had strong dresses that sold, but they did not sell to the level of the store.”
To rely on the success of wedding clothes, this year, Abercrombie launched a recreation shop, and Haravitz expects the company growth driver.
“We had a very pleasant reaction to swimming early. “We can also increase the planned recreation shop by putting a few more marketing and a few more assets.”
She expects the Abercrombie brand back to growth in the back half of the year.
The Hollister branded brand was much better than its namesake. A quarter of sales in Hollister increased by 22%and comparable sales increased by 23%. It is expected that a teenager -oriented net will lead to the growth of abercrambis forward.
