Abercrombie & Fitch Sees Stock Price Plummet After Weak Guidance

Abercrombie & Fitch did little to inspire investors with the recent release of its sales projections, as CNBC detailed. Despite very strong growth over the course of the past two years, that story is apparently starting to turn a new page in the immediate future.

Abercrombie shared that it expects sales growth of between 3% and 5% for fiscal 2025, falling short of the anticipated 6.8%, per LSEG. Earnings per share (EPS) is projected to come in at between $1.25 and $1.45, not quite meeting the expectation of $1.97. The company’s slowing growth indicators may be worrisome for investors, as the flagship brand had outperformed the Hollister label to anchor sunnier reports in days past.

That’s no longer the case. Hollister sales hiked upward by 16% in the most recent quarter, while Abercrombie posted a mere 2% improvement. Comparable sales at the flagship brand increased by 5%, while Hollister netted a 24% gain on this score.

CEO Fran Horowitz outlined the current state of affairs during an analyst call, gesturing toward relative weakness from the Abercrombie brand.

“Last year we did have a bit of a flawless transition into spring, and this year it’s a bit more normalized. [The full company’s sales are] positive for the month of February, seeing a little bit of a difference between the brands. Hollister came in very strong off of a very, very strong Q4 and Abercrombie is a bit negative,” Horowitz said.

Abercrombie & Fitch Stock Drops Significantly Following Earnings Report

According to Reuters, Abercrombie stock took a nosedive on March 5 following the weaker-than-anticipated earnings. As of 11:54 a.m. ET, shares had fallen by 14.53% to rest at $82.15.

The company announced a forecasted fiscal 2025 operating margin of between 14% and 15% and indicated that the economic impact of President Donald Trump’s imposed tariffs could end up amounting to about $5 million. While Abercrombie sources 5% to 6% of its product from China, its exposure to Mexican imports is “immaterial,” as Reuters explained.

It wasn’t all bad news for the style and fashion brand. Adjusted profit per share of $3.57 narrowly beat estimates of $3.54, and the company’s annual target of $10.40 to $11.40 also edged out estimates.

However, these beats weren’t enough to convince industry experts.

“The initial print does not sow confidence,” William Blair analyst Dylan Carden said of Abercrombie’s earnings.