Lululemon, Abercrombie and American Eagle launch holiday sales in early 2024

ORLANDO, Fla. — lululemon and Abercrombie & Fitch They raised their outlook for the fourth quarter on Monday after seeing a strong response from shoppers during the all-important holiday season.

Lululemon’s fresh outlook was welcomed by investors, leading the stock to rise in early trading. But Abercrombie shares fell about 17% as investors question whether its rapid growth is coming to an end.

Lululemon now expects sales to grow 11% to 12% to $3.56 billion to $3.58 billion, up from a previous range of $3.48 billion to $3.51 billion.

Excluding an additional fiscal week the company will have in the fourth quarter of 2024, Lululemon expects sales growth of between 6% and 7%.

The company also raised its profit outlook. Lululemon now forecasts fourth-quarter earnings per share between $5.81 and $5.85, compared to previous guidance of between $5.56 and $5.64. It expects gross margins to grow 0.3 percentage points after previously forecasting they would decline between 0.2 and 0.3 percentage points.

“During the holiday season, our guests responded well to our product offering, allowing us to increase our guidance for the fourth quarter,” Chief Financial Officer Meghan Frank said in a statement.

Meanwhile, Abercrombie also expects its Christmas quarter to be slightly better than expected. The apparel company raised its net sales growth outlook to a range of 7% to 8%, compared to previous guidance of 5% to 7%.

Abercrombie now expects full-year sales to grow 15%. It previously expected sales to rise 14% to 15% during the period.

The outlook is a far cry from the box office numbers Abercrombie posted last year, when holiday sales rose a staggering 21% compared to the same period a year earlier.

Investors bullish on Abercrombie would say it makes sense to see the company’s growth begin to slow as it matures and surpasses tougher comparisons from the prior-year period, but after about two years of explosive stock growth, some they could turn bearish.

Still, Abercrombie’s full-year sales forecast is close to what it released last year, when revenue grew 16%.

In a press release, Abercrombie CEO Fran Horowitz said that going forward, the company will focus more on growing profits than sales as it seeks to “drive long-term shareholder value.”

“After two expected years of double-digit top and bottom line growth, I am more confident than ever in the power of our brands and operating model as we move forward, supported by the outstanding capabilities we have built,” Horowitz said. . “In 2025, we will look to continue sustainable and profitable growth by executing our playbooks to win and retain customers around the world. Our goal is to leverage our healthy margin and balance sheet structure to increase dollar operating income and earnings per action at rates faster than sales.”

Retailers released their forecasts ahead of the annual ICR conference in Orlando, when some of the biggest U.S. retailers are expected to announce early holiday results and meet with investors and analysts about their performance. The conference brings together Wall Street’s biggest banks, law firms, private equity firms and investors, and is known for setting the tone for consumer deals and retailer performance early in the year.

Macy’swhich is expected to present at the conference, also published early results but had no good news to share like some of its competitors. The department stores now expect sales to be at, or slightly below, their previously issued range of between $7.8 billion and $8.0 billion. Its shares fell more than 6% in early trading.

Urban Outfitters also released its first holiday results and said net sales for the two months ended Dec. 31 grew 10% compared to the same period a year earlier. Retail segment comparable sales increased 6%, driven by strong online sales.

Comparable sales for Urban’s namesake brand fell 4% as the chain continued to underperform Anthropologie and Free People, where comparable sales grew 10% and 9%, respectively.

Meanwhile, sales soared 55% at Urban’s rental service Nuuly, driven by a 53% increase in average active subscribers.

Shares fell nearly 5% in early trading.

american eagle It also raised its outlook for the fourth quarter and said it expects an operating profit of about $135 million, up from its previous guidance of $125 million. It said comparable sales for the quarter to January 4 rose in the single digits, compared with previous guidance of a 1% increase.

Shares fell about 4% in early trading.

The holiday shopping season was generally not expected to produce the spectacular numbers that became common after the Covid-19 pandemic. The National Retail Federation said it expected sales to grow between 2.5% and 3.5%. When inflation is taken into account, real growth was expected to be minimal.

Still, some initial readings have noted that the Christmas season can be a a bit better than expected.

US holiday retail sales, excluding auto sales, increased 3.8% year over year between Nov. 1 and Dec. 24, according to Mastercard SpendingPulse, which measures in-store and online sales across all payment types.