New York City, New York – Iconic fashion retailer, Abercrombie & Fitch, is experiencing a slowdown in its growth trajectory. The company recently announced weaker-than-expected guidance for its current quarter and fiscal year 2025. Abercrombie revealed that it anticipates sales growth to be between 3% and 5% in fiscal 2025, falling below Wall Street’s expectations of 6.8% growth. Additionally, the apparel retailer foresees earnings per share for the current quarter to range from $1.25 to $1.45, falling short of the $1.97 forecasted by analysts.
Despite narrowly beating Wall Street’s expectations in its fiscal fourth quarter, with reported net income of $187 million, Abercrombie’s sales rose to $1.58 billion, up 9% from the same period last year. The company’s performance indicates a shift in its previously robust growth trends towards more tempered numbers.
This adjustment in Abercrombie’s trajectory comes after a period of remarkable stock and sales growth. The company’s business is now stabilizing, prompting market observers to consider other retail contenders with more immediate growth potential. While Abercrombie continues to expand internationally, uncertainties loom regarding whether it can sustain its previous stellar performance under CEO Fran Horowitz.
Consumer sentiment also plays a role in Abercrombie’s future prospects, as cautious spending patterns since the beginning of the year have affected retailers that offer discretionary goods like clothing. Factors such as geopolitical tensions, unseasonable weather, and recent tragic events have dampened consumer demand. Furthermore, the proposed TikTok ban may have impacted Abercrombie’s operations, as the company relies heavily on the platform for marketing purposes.
Looking ahead, Abercrombie aims to shift its focus towards profitability rather than just revenue growth. CEO Fran Horowitz expressed confidence in the company’s brands and operational model as it seeks to drive long-term shareholder value. By leveraging its strong margin structure and balance sheet, Abercrombie is poised to achieve sustainable, profitable growth in the coming years.
