ANF - Why Abercrombie & Fitch Stock Plunged 17.5% at the Open Today
Shares of Abercrombie & Fitch (NYSE: ANF) , a basics retailer focused on the youth market, fell a huge 17.5% at the open of trading on March 2. The news that precipitated that drop was the company's fourth-quarter 2021 earnings update, which hit the market before it opened for the day. It wasn't all bad news, but clearly investors were not particularly pleased.
Abercrombie & Fitch's fourth-quarter 2021 sales came in at $1.2 billion, up roughly 4% from the same quarter of 2020. However, the company's sales are still 2% below their pre-pandemic levels, so the performance was mixed, at best. Notably both the retailer's namesake brand and its Hollister nameplate reported year-over-year sales growth, but Hollister's sales remain below 2019 levels. Its recovery clearly hasn't been quite as robust as that of sister brand Abercrombie, which is the smaller of the two nameplates. That said, digital sales grew to 48% of the total, suggesting that the company's online efforts are producing fairly solid results. The company's adjusted earnings in the final quarter of 2021 was $1.14 per share, down from $1.50 in the prior year. That's not great, but alone it's not the reason for the steep price drop.
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Why Abercrombie & Fitch Stock Plunged 17.5% at the Open Today