Abercrombie and Lululemon reported early holiday results
The companies shared their latest quarterly forecasts ahead of meetings with investors and analysts at this week’s ICR conference in Orlando. Other retailers are also expected to release holiday updates during the three-day event.
So far, holiday spending estimates have been positive. Online sales rose 4.9% year over year to $222.1 billion in November and December, according to Adobe Analytics. Holiday retail sales, excluding auto sales, rose 3.1% in the U.S. year over year, according to preliminary data from Mastercard SpendingPulse, which tracks in-store and online retail sales across all payment types.
However, it’s still unclear which retailers got more of those dollars spent by holiday shoppers.
The American Eagle looks like a winner. It said year-to-date quarterly revenue was up about 8% as of Dec. 30, with sales of its namesake brand increasing by high single digits and Aerie increasing by the low teens. It said it expects revenue and operating profits to be better than expected for the fiscal fourth quarter.
The company said fiscal fourth-quarter revenue will rise to the low double digits and operating profit is expected to be about $130 million, compared to previous guidance of $105 million to $115 million.
The retailer’s momentum “continued into early January,” American Eagle CEO Jay Schottenstein said in a press release.
Mall rival Abercrombie said it expects net sales to increase in the mid-teens and operating margin to reach about 15% for the fiscal fourth quarter. This compares to its previous forecast of net sales growth in the low double digits and operating margin in the range of 12% to 14%. The results for the full fiscal year were raised to match.
In a press release, Abercrombie & Fitch CEO Fran Horowitz said Abercrombie & Fitch’s women’s business is expected to have its highest fourth-quarter sales ever. Additionally, it said its men’s business has grown and its Hollister brand is on track for year-over-year growth and higher profits as the company offers better merchandise and manages its inventory sharply.
Lululemon gave more modest revisions to its fourth-quarter outlook. It said it expects net revenue to be in the range of $3.17 billion to $3.19 billion for the fourth quarter. It previously expected a range of $3.135 billion to $3.17 billion. Diluted EPS is also expected to come in at a higher level – in the range of $4.96 to $5.00 for the quarter, compared to the previous range of $4.85 to $4.93.
Retail earnings season begins in mid-February, with names like Walmart, Target, and Home Depot. Abercrombie, American Eagle and Lululemon are expected to report full holiday results in March.
(tags for translation) American Eagle Outfitters Inc