Lululemon, Abercrombie, American Eagle will release early 2024 holiday sales

Orlando, Fla. – Big-name retailers posted better-than-expected gains on Monday, but shares fell as Wall Street was unimpressed.

Lululemon, Abercrombie and Fitch And American Eagle They raised their fourth-quarter outlook on Monday after seeing a strong response from consumers during the all-important holiday season. Urban Outfitters It also saw strong holiday growth, however Massey A key quarterback said it was getting worse than he expected.

Still, shares of most of those companies were trading lower on Monday. Abercrombie’s stock has fallen sharply and is down 15%, with investors wondering whether its rapid growth is coming to an end.

Lululemon now expects sales to grow 11 percent to 12 percent to $3.56 billion and $3.58 billion, up from $3.48 billion and $3.51 billion previously.

Excluding the company’s extra fiscal week in the fourth quarter of 2024, Lululemon expects sales growth of 6 percent to 7 percent.

The company raised its profit outlook. Lululemon now forecasts fourth-quarter earnings per share of between $5.81 and $5.85, up from prior guidance of between $5.56 and $5.64. Gross margins are expected to contract between 0.2 and 0.3 percentage points after previously forecast.

“Our guests responded well to our product offerings during the holiday season, which allowed us to increase our fourth quarter guidance,” Chief Financial Officer Megan Frank said in a statement.

Lululemon shares rose nearly 1 percent Monday.

Meanwhile, Abercrombie expects the holiday quarter to be slightly better than expected. The apparel company raised its net sales growth outlook to between 7% and 8%, compared to previous guidance of between 5% and 7%.

Abercrombie now expects full-year sales to grow 15 percent. Previously, sales were expected to increase between 14 percent and 15 percent.

The outlook is a far cry from the blockbuster numbers Abercrombie put out last year, with holiday sales up an impressive 21% compared to a year ago.

Investors have been bullish on Abercrombie, saying it’s fair to see the company’s growth slowing from a year ago as it begins to mature and solidify, but following two years of explosive stock growth, some may turn bearish.

Still, Abercrombie’s full-year sales guidance is close to what it issued last year, when revenue grew 16 percent.

In a news release, Abercrombie CEO Fran Horowitz said going forward, the company will focus more on growing profits than sales as it looks to “drive long-term stock value.”

“I’m confident in the strength of our brands and operating model as we move forward, following the expected double-digit top-line and bottom-line growth, supported by the superior capabilities we’ve built,” said Horowitz. . “By 2025, we will continue to drive sustainable, profitable growth through the execution of our playbooks to win and retain customers around the world. Our goal is to leverage our healthy profit structure and balance sheet to grow operating income dollars and earnings per share. It has more momentum than sales.”

Some of the top U.S. retailers will report early holiday results and meet with investors and analysts about their performance, while the retailers release their guidance ahead of the annual ICR conference in Orlando. The conference brings together Wall Street’s biggest banks, law firms, private equity firms and investors, and is known to set the tone for consumer deals and retail performance at the start of the year.

Massim, expected to present at the conference, released early results but did not have as good news to share as some of its competitors. The department store is now expecting sales to be at, or slightly below, the previously given range of between $7.8 billion and $8.0 billion. Its shares fell more than 8% on Monday.

Urban Outfitters also released early holiday results and said net sales for the two months ended December 31 were up 10% compared to last year. Comparable retail segment sales increased 6 percent on strong online sales.

The chain’s Anthropologie and Independents continued to underperform, while city name label banner comparable sales fell 4 percent.

Meanwhile, sales at Urban’s rental service Nulli grew 55 percent, driven by a 53 percent increase in average active subscribers.

Shares were down 2 percent on Monday.

American Eagle raised its fourth-quarter outlook and said it expects profit to reach $135 million, up from previous guidance of $125 million. Comparable sales for the quarter through Jan. 4 rose in the low single digits, up 1% from prior guidance.

Total revenue, however, will be down about 5% from a year ago due to American Eagle’s fiscal calendar, which is less than a week away, the company said. The timing shift is expected to impact sales of $85 million in the fourth quarter and $60 million for the full year.

Shares were down about 4% on Monday.

In general, the holiday shopping season is not expected to produce the usual dropout numbers following the Covid-19 pandemic. The National Retail Federation said sales will continue to grow among them 2.5% and 3.5%. Real growth is expected to be lower when inflation is taken into account.

Still, some early readers suggested that the festive season might be better than expected.

Retail sales in the US for the holiday season, excluding auto sales; It grew 3.8 percent year-on-year. Between November 1 and December 24, according to Mastercard SpendingPulse, it measures in-store and online sales by payment type.