Lululemon, Abercrombie, American Eagle release early 2024 holiday sales

ORLANDO, Fla. — Big-name retailers posted largely better-than-expected early holiday results on Monday, but their shares fell as Wall Street came away unimpressed.

Lululemon, Abercrombie & Fitch and American Eagle raised their fourth-quarter outlooks on Monday after seeing a strong response from shoppers during the all-important holiday season. Urban Outfitters also saw strong holiday growth, but Macy’s said its key quarter was going worse than it had anticipated.

Still, shares of many of those companies traded lower Monday. Abercrombie’s stock tumbled the most and dropped 15%, as investors wonder if its rapid growth is coming to an end.

Lululemon now expects sales to grow between 11% and 12% to between $3.56 billion and $3.58 billion, up from a previous range of $3.48 billion and $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 hiked its profit outlook. Lululemon is now forecasting fourth-quarter earnings per share to be between $5.81 and $5.85, compared with previous guidance of between $5.56 and $5.64. It expects gross margins to grow by 0.3 percentage point after previously forecasting they would decline between 0.2 and 0.3 percentage point. 

“During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth quarter guidance,” finance chief Meghan Frank said in a statement. 

Lululemon’s stock climbed nearly 1% on Monday.

Meanwhile, Abercrombie also expects its holiday quarter to be slightly better than anticipated. The apparel company nudged up its net sales growth outlook to a range of between 7% and 8%, compared with previous guidance of between 5% and 7%. 

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

The outlook is a far cry from the blockbuster numbers that Abercrombie put out last year, when holiday sales jumped by a staggering 21% compared with the year-ago period. 

Investors bullish on Abercrombie would say that it makes sense to see the company’s growth start to slow down as it matures and laps tougher comparisons from the year-ago period, but following about two years of explosive stock growth, some could be turning bearish. 

Still, Abercrombie’s full year-sales guidance is close to what it put out last year, when revenue grew by 16%. 

In a news release, Abercrombie CEO Fran Horowitz signaled that moving forward, the company will be more focused on boosting profits than sales as it looks to “drive long-term shareholder value.” 

“Following an expected two years of double-digit top and bottom-line growth, I am as confident as ever in the power of our brands and operating model as we move forward, supported by the outstanding capabilities we’ve built,” said Horowitz. “In 2025, we will look to continue sustainable, profitable growth through the execution of our playbooks to win and…