Overview

• Abercrombie & Fitch lowered its 2025 sales growth forecast to 3%-5%, below analysts' expectations of 6.77%, signaling a slowdown from 2024's 14% growth.
• The company anticipates operating margins of 14%-15% for 2025, with the first half impacted by higher freight costs and inventory adjustments, and the second half benefiting from lower freight expenses.
• Newly announced tariffs on imports from China, Canada, and Mexico are expected to reduce operating margin by $5 million, with further potential tariff impacts unaccounted for in the guidance.
• While Hollister brand sales rose 16% in the holiday quarter, Abercrombie's namesake brand showed weaker performance, with analysts expressing concern over its future growth prospects.
• Abercrombie plans to open 100 new stores in 2025 and has implemented a $1.3 billion stock buyback program despite inventory increases and investor concerns over demand challenges.