Abercrombie & Fitch Q1 Profit Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: NASDAQ.COM
- Profit Decline: Abercrombie & Fitch reported a first-quarter profit of $67.13 million, or $1.47 per share, which is a significant drop from last year's $80.41 million and $1.59 per share, indicating pressure on the company's profitability.
- Revenue Growth: Despite the profit decline, the company saw a 1.5% year-over-year increase in revenue to $1.113 billion, demonstrating some sales resilience in a highly competitive market environment.
- Performance Comparison: The earnings per share decreased by 7.5% compared to the same period last year, which may undermine investor confidence in the company's future profitability and negatively impact its stock price.
- Market Reaction Outlook: Given the profit drop and lackluster revenue growth, the market is expected to adopt a cautious stance towards Abercrombie & Fitch's future performance, potentially leading investors to reassess the stock's investment value.
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Analyst Views on ANF
Wall Street analysts forecast ANF stock price to rise
11 Analyst Rating
6 Buy
5 Hold
0 Sell
Moderate Buy
Current: 82.180
Low
95.00
Averages
123.67
High
160.00
Current: 82.180
Low
95.00
Averages
123.67
High
160.00
About ANF
Abercrombie & Fitch Co. is a global, digitally led omnichannel specialty retailer of apparel and accessories. The Company offers an assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its Company-owned stores and digital channels, as well as through various third-party arrangements. The Company’s brands include Abercrombie brands, which includes Abercrombie & Fitch, abercrombie kids, and Your Personal Best (YPB), and Hollister brands, which include Hollister and Gilly Hicks. Its geographic segments include the Americas, EMEA, and APAC. The Company also offers its loyalty programs, which include Abercrombie’s myAbercrombie and Hollister’s Hollister House Rewards. The Company operates approximately 790 stores under these brands across North America, Europe, Asia and the Middle East, as well as the e-commerce sites abercrombie.com, abercrombiekids.com, and hollisterco.com.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Optimistic Future Outlook: Management anticipates that tariff-related pressures will ease in the coming quarters, projecting full-year net sales growth of 3% to 5% and earnings per share targets of $10.20 to $11.00, reflecting confidence in future performance.
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See More
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- Regional Sales Disparity: While sales in the EMEA division fell 10%, the Americas segment saw a 3% increase, and the Asia-Pacific region surged by 24%, indicating differentiated performance across markets and enhancing the company's global business strategy.
- Shareholder Return Plan: The company plans to return $450 million to investors through a stock buyback program, with CEO Fran Horowitz stating that strong cash flow and double-digit operating margins will support this return strategy, further boosting investor confidence.
- Improved Earnings Outlook: Although earnings per share fell 8% to $1.47, it still exceeded analysts' expectations of $1.28, and management anticipates that tariff-related pressures will ease in the coming quarters, with a full-year net sales growth target of 3% to 5%.
See More
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- Profitability Improvement: The company achieved an earnings per share (EPS) of $1.47, exceeding expectations, with an operating margin of 8%, surpassing planned figures, which demonstrates significant progress in cost control and efficiency enhancement, boosting investor confidence.
- Regional Performance Discrepancies: Sales in the Americas rose by 3% and APAC surged by 24%, while EMEA experienced a 10% decline due to regional conflicts, highlighting significant performance disparities across markets and the need to address ongoing pressures in EMEA.
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See More
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- Solid Operating Profit: The company reported operating income of $89 million and adjusted EBITDA of $131 million, with a slight decline in operating margin primarily due to increased marketing and ERP implementation costs, indicating effective cost control measures.
- Optimistic Future Outlook: CFO Ball projected full-year earnings per share in the range of $10.20 to $11, with net sales growth expected between 3% and 5%, reflecting confidence in future performance, particularly in developing new channels and partnerships.
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See More
