Abercrombie & Fitch (ANF) stock witnessed a sharp plummet of 12.51% in pre-market trading on Wednesday, March 5, 2025, following the company's downbeat annual sales growth forecast.
The apparel retailer forecasted net sales growth in the range of 3% to 5% for fiscal 2025, significantly lower than market expectations of a 6.77% increase. This weak outlook raised concerns about sluggish consumer spending on higher-priced apparel as inflation and economic uncertainties weigh on consumer sentiment. As a result, Abercrombie & Fitch's ability to drive sales growth through premium pricing could be challenged.
In its earnings release, Abercrombie & Fitch also guided for fiscal 2025 operating margin in the range of 14% to 15%, down from the 15% reported in 2024. The company cited the impact of tariffs announced in February 2025 on goods imported from China, Mexico, and Canada into the U.S. as a factor impacting its margin outlook. Despite delivering strong results for fiscal 2024, with net sales up 16% and operating income growth of 53%, Abercrombie & Fitch's cautious guidance for the coming year has dampened investor sentiment.
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