By Granth Vanaik and Juveria Tabassum
(Reuters) -Apparel retailers including Lululemon and Abercrombie & Fitch on Monday offered fresh signs of a stronger-than-expected holiday shopping season in the United States after they raised sales expectations for the crucial fourth quarter.
Footwear maker Crocs and apparel retailer American Eagle Outfitters also raised their sales projections on Monday, sending their shares up 20% and 6% respectively.
The strong sales expectations for the holiday season, which was filled with steeper and earlier discounts, also highlights demand was resilient through the period even as budgets remained constrained.
Last week, Adobe Analytics said that online spending by U.S. consumers rose 5% during the holiday season on the back of intense promotions on items such as electronics and apparel.
However, focus on fresher styles and limited inventory overhang also helped Abercrombie and Lululemon sell more products at full prices as well.
Lululemon last month had forecast tepid holiday quarter results, but said on Monday that it was pleased with its performance during the period.
“Our sales trend remains balanced across channels, categories and geographies, enabling us to raise our guidance,” CFO Meghan Frank said in a statement.
Lululemon now expects fourth-quarter revenue to be between $3.17 billion and $3.19 billion, slightly above prior expectations. It projected profit per share to be in the range of $4.96 to $5.00, compared with its prior forecast of $4.85 to $4.93.
“Most of these companies put out pretty conservative guidance … so I’m not that surprised that we might see some upward revisions,” Morningstar analyst David Swartz said.
Abercrombie expects fourth-quarter net sales to rise in the high teens percentage range, compared with its previous forecast of up low double-digits.
The women’s business was expected to achieve its highest-ever holiday quarter sales, Abercrombie’s CEO, Fran Horowitz, said in a statement.
Abercrombie shares, which had tripled in 2023, were up 6% in afternoon trading, while Lululemon was down marginally.
Crocs, which struggled with inventory destocking at wholesalers last year, on Monday said its namesake brand had gained market share.
(Reporting by Granth Vanaik and Juveria Tabassum in Bengaluru; Editing by Shilpi Majumdar, Sriraj Kalluvila and Maju Samuel)
