Abercrombie & Fitch shares spike after earnings beat, store closures
Abercrombie & Fitch’s stock ballooned on Wednesday after the retailer beat Wall Street’s earnings estimates for the fourth quarter and announced it would close up to 40 stores in the next year.
Retailers of all stripes are announcing store closures in waves as the outcome of the 2018 holiday shopping season broadens the divide between retailers that are able to compete against Amazon and those that are struggling.
“The separation between those who can afford to invest and those who can’t is real,” Target CEO Brian Cornell told investors on Tuesday. “Those who don’t have the resources to evolve are being left behind by their customers and, unfortunately for them, that means they need to close some or all of their doors.”
At Abercrombie, the youth retailer has joined many other companies in the industry in closing physical stores and investing in upgrading the remaining locations. It shuttered 29 stores in 2018 and more could be coming in 2020 and beyond, according to CEO Fran Horowitz.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ANF | ABERCROMBIE & FITCH CO. | 115.09 | -4.64 | -3.88% |
Sales at the New Albany, Ohio-based company were $1.2 billion in the three months through Feb. 2, a 3 percent year-over-year decline but higher than analysts expected. The results sent shares up over 23 percent midway through the trading day.
Same-store sales rose 3 percent in the quarter, while profits rose to $1.35 per share -- also higher than Wall Street predictions.
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Abercrombie is projecting net sales in 2019 to rise as much as 4 percent and same-store sales to increase in the low single digits.