Abercrombie & Fitch shares fall after star retailer posts weak guidance for year ahead

Core Viewpoint - Abercrombie & Fitch is experiencing a slowdown in growth, with weaker-than-expected guidance for the current quarter and fiscal 2025, anticipating sales growth of only 3% to 5%, below the 6.8% estimate from Wall Street [1] Group 1: Financial Performance - The company reported a net income of $187 million, or$3.57 per share, for the fiscal fourth quarter, compared to $158 million, or$2.97 per share, a year earlier [2] - Sales increased to $1.58 billion, reflecting a 9$1.45 billion in the previous year [3] - Earnings per share for the current quarter are expected to be between $1.25 and$1.45, falling short of the $1.97 expectation [1] Group 2: Market and Consumer Trends - Consumer confidence has declined to its lowest levels since 2021, impacting discretionary spending on apparel [6] - The proposed TikTok ban may have affected Abercrombie's marketing efforts, similar to its impact on E.l.f. Beauty's performance [7] Group 3: Strategic Focus - The company is shifting its focus towards boosting profits rather than just sales, aiming for sustainable, profitable growth through effective execution of its strategies [8] - CEO Fran Horowitz expressed confidence in the brand's potential and the operational model, emphasizing the goal of growing operating income and earnings per share at rates faster than sales [8] Group 4: Market Sentiment - Following a period of rapid growth, Abercrombie's business appears to be stabilizing, with market interest potentially shifting towards other retail companies with more immediate growth prospects [4][5]