Abercrombie & Fitch (NYSE:ANF) shares fell nearly 14% on Wednesday morning following the company's release of cautious guidance for fiscal year 2025, overshadowing its strong fourth-quarter performance.
The retailer reported a 9% year-over-year increase in fourth-quarter revenue, reaching $1.58 billion, and an 18% rise in net income to $189.7 million.
Diluted earnings per share (EPS) grew by 20% to $3.57. For the full fiscal year 2024, net sales climbed 16% to nearly $5 billion, with comparable sales up 17%.
The Hollister brand led the growth with a 16% increase in the fourth quarter.
Despite these results, Abercrombie & Fitch projected a modest 3% to 5% net sales growth for fiscal year 2025, below analysts' expectations of a 6.8% rise. The company also forecasted an operating margin between 14% and 15%, considering the potential impact of new US tariffs on imports from China, Mexico, and Canada.
The conservative outlook reflects concerns over weak consumer spending and the uncertainty surrounding the tariffs, which have prompted many retailers to temper their expectations. In response to these challenges, Abercrombie & Fitch announced a new $1.3 billion stock buyback program, aiming to repurchase approximately $100 million in shares per quarter throughout 2025.
The company's shares have declined nearly 46% this year, with the latest drop bringing them to a 15-month low.