Abercrombie & Fitch (NYSE:ANF) said it has lifted its full-year capital spending expectations while trimming and narrowing parts of its sales and margin guidance, prompting a pullback in the stock.
Shares of the apparel retailer fell about 5.5% in premarket trading on Monday following the update.
The company now forecasts full-year capital expenditure of roughly $245 million, up from its prior estimate of around $225 million and above the Bloomberg Consensus forecast of $229.9 million.
Abercrombie also revised its full-year net sales growth outlook, now guiding to growth of at least 6%, compared with its earlier range of 6% to 7%. At the same time, it tightened its operating margin expectation to 13%, versus the previous range of 13% to 13.5%.
For full-year earnings, the retailer now expects earnings per share of $10.30 to $10.40, slightly narrowing its prior guidance of $10.20 to $10.50. The current Bloomberg Consensus estimate for EPS stands at $10.25.
Looking specifically at the fourth quarter, Abercrombie projects net sales growth of 5%, compared with its earlier outlook of 4% to 6%. Fourth-quarter earnings per share are now expected to fall between $3.50 and $3.60, a tighter range than the previous guidance of $3.40 to $3.70, with the consensus estimate at $3.60. The operating margin outlook for the quarter remains unchanged at around 14%.
Commenting on recent trading, the company’s CEO said, “At Abercrombie Brands, we saw a strong customer response over the holidays, and we now expect to grow net sales in the low single digits for the fourth quarter on top of a record result last year.”