Pedestrians are mirrored within the window of an Abercrombie & Fitch retailer in New York.
Craig Warga | Bloomberg | Getty Images
The chance that Abercrombie & Fitch will face further rounds of short-term retailer closures due to rising Covid-19 instances despatched the retailer’s shares down Tuesday, regardless of it reporting an earnings beat, as traders feared the shutdowns may threaten Abercrombie’s key vacation procuring season.
Abercrombie is now calling for gross sales within the fourth quarter to fall 5% to 10%, which might be a steeper decline than in its newest interval.
Shares had been down about 3% in late-morning buying and selling.
CEO Fran Horowitz instructed CNBC in a cellphone interview that the corporate has a plan in place to soften the blow of the closures. That’s one thing no retailer was ready to attest to in March, when the pandemic first shuttered stores in an unprecedented try to halt the unfold of the coronavirus.
“We’ve been managing through this honestly all year now, so we’re understanding what it means,” Horowitz stated. “Eighty percent of our stores in California were closed during back-to-school this year. … We’ve created a playbook.”
The retailer has discovered how to preserve a tighter management on its inventories and run a smoother enterprise on-line, as internet gross sales ramp up, she stated. Abercrombie’s digital gross sales had been up 43% in the course of the fiscal third quarter, pushed by demand for its loungewear and comfortable equipment.
In the quarter ended Oct. 31, the corporate earned 76 cents per share after excluding one-time gadgets. Net gross sales fell 5% from a yr in the past to $819.7 million. Both earnings and gross sales topped estimates. According to Refinitiv, analysts anticipated Abercrombie to breakeven on gross sales of $739.36 million.
The world well being disaster can be impacting Abercrombie’s enterprise outdoors of the United States. As of Monday, roughly half of its stores within the Europe, Middle East and Africa area are closed due to lockdown restrictions, the corporate stated. Four areas are darkish within the U.S.
The seven-day common of every day new Covid infections within the U.S. stands at 172,118 as of Monday, in accordance to a CNBC evaluation of Johns Hopkins University knowledge, marking an all-time file.