Key Takeaways
- Abercrombie & Fitch CEO Fran Horowitz said the clothing retailer continues to operate in an “increasingly uncertain environment.”
- The company reported better-than-expected second-quarter profit and sales and also raised its full-year revenue outlook.
- Abercrombie's shares were down 17% in early afternoon trading on Wednesday.
Shares of clothing retailer Abercrombie & Fitch (ANF) plummeted on Wednesday after the company's CEO expressed concerns about the economy's impact on the retail market.
“We continue to operate in an increasingly uncertain environment,” CEO Fran Horowitz said during the company's second-quarter financial call.
The comments dampened an otherwise strong financial report from Abercrombie, which reported second-quarter adjusted earnings of $2.50 per share and sales up 21 percent to $1.13 billion, its highest ever. Same-store sales rose 18 percent. All three figures beat analysts' expectations.
The company raised its sales outlook.
Total sales at Abercrombie stores rose 26 percent to $582.4 million, while total sales at Hollister stores rose 17 percent to $551.6 million, both beating expectations.
The company raised its full-year sales growth forecast to the range of 12% to 13% from 10% previously.
Stock prices will rise by more than 50% in 2024
Abercrombie's shares were down 17% in early afternoon trading on Wednesday.
One reason for the sudden drop in the stock price may be that expectations for the company were high given its recent strong performance.
Abercrombie's shares hit an all-time high in May after reporting first-quarter earnings, then hit another all-time high in June, and although they have since fallen, they are still up more than 50% this year.