Abercrombie & Fitch shares tumbled around 10% on Thursday after the apparel retailer reported disappointing sales as more families are delaying back-to-school clothing purchases.
The company, which also owns Hollister, admitted it continues to experience shipping delays and inventory constraints due to manufacturing facilities being shutdown overseas.
“Right now, it’s tough out there. All the articles you read are real,” Chief Financial Officer Scott Lipesky told analysts on an earnings conference call. “And those of us on this side of the fence are living through it every day.”
Abercrombie is managing through shipment delays of one to three weeks, on average, by pulling forward deliveries as much as possible and leveraging air freight where necessary, Lipesky said. However, he expects these steps will lead to higher costs in the back half of the year.
For the fiscal second quarter, net income rose to $108.5 million, or $1.69 per share, from $5.46 million, or 9 cents a share, a year earlier. Excluding one-time items, Abercrombie earned $1.70 per share, topping estimates for 77 cents, based on a survey of analysts by Refinitiv.
Net sales grew 24% to $864.9 million from $698.3 million a year earlier. That was short of expectations for $879 million.
The company said sales at its Hollister, Gilly Hicks and Social Tourist brands rose 20% year over year, while they were up 30% at Abercrombie.
For its fiscal third quarter, Abercrombie is now calling for net sales to be up 2% to 4% from 2019 levels of roughly $863 million.
Net sales in fiscal 2021 are forecast to be up low to mid single digits from the $3.6 billion Abercrombie achieved in 2019.
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