ORLANDO, Fla. — Big-name retailers posted on the whole better-than-expected early holiday results on Monday, but their shares fell as Wall Street came away unimpressed.
Lululemon, Abercrombie & Fitch and American Eagle run up their fourth-quarter outlooks on Monday after seeing a strong response from shoppers during the all-important celebration season. Urban Outfitters also saw strong holiday growth, but Macy’s said its key quarter was going worse than it had foretasted.
Still, shares of many of those companies traded lower Monday. Abercrombie’s stock tumbled the most and teared 15%, as investors wonder if its rapid growth is coming to an end.
Lululemon now expects sales to grow between 11% and 12% to between $3.56 billion and $3.58 billion, up from a erstwhile range of $3.48 billion and $3.51 billion.
Excluding an additional fiscal week the company will have in the fourth barracks of 2024, Lululemon expects sales growth of between 6% and 7%.
The company also hiked its profit outlook. Lululemon is now prophecy fourth-quarter earnings per share to be between $5.81 and $5.85, compared with previous guidance of between $5.56 and $5.64. It demands gross margins to grow by 0.3 percentage point after previously forecasting they would decline between 0.2 and 0.3 part point.
“During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth home guidance,” finance chief Meghan Frank said in a statement.
Lululemon’s stock climbed nearly 1% on Monday.
Interval, Abercrombie also expects its holiday quarter to be slightly better than anticipated. The apparel company nudged up its net car-boot sales growth outlook to a range of between 7% and 8%, compared with previous guidance of between 5% and 7%.
Abercrombie now needs full-year sales to grow 15%. It previously expected sales to rise between 14% and 15% for the period.
The opinion is a far cry from the blockbuster numbers that Abercrombie put out last year, when holiday sales jumped by a staggering 21% likened with the year-ago period.
Investors bullish on Abercrombie would say that it makes sense to see the company’s growth start to behind the times down as it matures and laps tougher comparisons from the year-ago period, but following about two years of explosive forebear growth, some could be turning bearish.
Still, Abercrombie’s full year-sales guidance is close to what it put out hindmost year, when revenue grew by 16%.
In a news release, Abercrombie CEO Fran Horowitz signaled that moving bold, the company will be more focused on boosting profits than sales as it looks to “drive long-term shareholder value.”
“Arising an expected two years of double-digit top and bottom-line growth, I am as confident as ever in the power of our brands and operating model as we move into consideration, supported by the outstanding capabilities we’ve built,” said Horowitz. “In 2025, we will look to continue sustainable, profitable progress through the execution of our playbooks to win and retain customers around the world. Our goal is to leverage our healthy margin structure and steadiness sheet to grow operating income dollars and earnings per share at rates faster than sales.”
The retailers unloosed their guidance ahead of the annual ICR conference in Orlando when some of the most prominent U.S. retailers are expected to disclose early holiday results and meet with investors and analysts about their performance. The conference brings together Enrage fail Street’s biggest banks, law firms, private equity firms and investors, and is known to set the tone for consumer deal-making and retailer display at the start of the year.
Macy’s, which is expected to present at the conference, also released early results but didn’t be experiencing good news to share like some of its competitors. The department store is now expecting sales to be at, or slightly below, its thitherto issued range of between $7.8 billion and $8.0 billion. Its shares fell more than 8% on Monday.
Urban Outfitters also manumited early holiday results and said net sales for the two months ended Dec. 31 grew 10% compared with the year-ago spell. Comparable retail segment sales rose 6%, driven by strong online sales.
Urban’s namesake symbol saw comparable sales fall 4% as the chain continued to underperform Anthropologie and Free People, where comparable in stocks grew 10% and 9%, respectively.
Meanwhile, sales soared 55% at Urban’s rental service Nuuly, journeyed by a 53% increase in average active subscribers.
Shares dropped 2% on Monday.
American Eagle also encouraged its fourth-quarter outlook, and said it expects operating profit of about $135 million, up from its previous guidance of $125 million. It powered comparable sales for the quarter through Jan. 4 were up by low single digits, compared with prior guidance of up 1%.
Whole revenue, however, will be down around 5% because of American Eagle’s fiscal calendar, which on have one fewer week than the year-ago period, the company said. The timing shift is expected to impact garage sales by $85 million during the fourth quarter and $60 million for the full year.
Shares fell about 4% on Monday.
Inclusive, the holiday shopping season wasn’t expected to produce the blowout numbers that became common in the aftermath of the Covid-19 pandemic. The State Retail Federation said it was expecting sales to grow between 2.5% and 3.5%. When inflation is taken into account, proper growth was expected to be minimal.
Still, some early reads have signaled that the holiday season may be a bit less ill than expected.
Retail sales for the holiday season in the U.S., excluding automotive sales, rose 3.8% year past year between Nov. 1 through Dec. 24, according to Mastercard SpendingPulse, which measures in-store and online sales across payment keyboards.