Abercrombie & Fitch said Monday that it saw strong demand from consumers over the holidays but that it didn’t have enough inventory to sell, particularly at its Hollister and Gilly Hicks lines.
Shares rose nearly 7% in extended trading following the release, despite Abercrombie lowering its guidance for fourth-quarter sales. The stock had closed the day down 2.5% at $32.35.
“We believe that, if we had the inventory on-hand, we would have delivered sales within our previous outlook range,” said Chief Executive Fran Horowitz, in a press release. “Post-holiday, as inventory has landed, we have experienced an acceleration in sales trend.”
Abercrombie said it sees fourth-quarter revenue up 4% to 6% from 2020 levels, or flat to down 2% compared with 2019. Previously, it was calling for sales in the holiday quarter to be up 3% to 5% versus 2019. It didn’t provide an earnings figure.
The company reported sales of $1.12 billion in 2020 and $1.19 billion in 2019.
Analysts had been calling for fourth-quarter earnings of $1.59 per share, with sales up 10.7% year over year, according to Refinitiv estimates.
The apparel retailer said it has faced heightened Covid-related impacts and restrictions, without detailing exactly what those are. Earlier in the day, Lululemon said its fourth-quarter sales are expected to come in on the low end of previous guidance due to staffing shortages and shortened store hours that have been exacerbated in recent weeks by omicron.
For the year, Abercrombie sees sales up 19% to 20% from year-ago levels. Analysts had been looking for a 21.2% increase.
The company also said it’s trimming its planned capital expenditures for the year to a range of $90 million to $95 million, down from $100 million.
Find the full release from Abercrombie here.