(AOF) – Abercrombie & Fitch revises upwards its revenue and operating margin forecasts for the fourth quarter and full fiscal year 2023. The American ready-to-wear company is targeting a increase in sales of between 14 and 15% compared to a previous forecast of 12-14%. In addition, the group expects an increase in operating margin for 2023 of around 11% compared to 10% previously announced.
“Abercrombie & Fitch’s women’s business is expected to reach its highest level of sales ever recorded in the fourth quarter, in addition to an acceleration in growth in the men’s business,” said the company’s CEO Fran Horowitz.
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Concerns remain
According to the Federation of Specialized Trade, Procos, in October 2022, activity fell by 1.5% year-on-year. However, the activity of beauty and health (+ 5.2%) and specialized food (+ 3.5%) are dynamic compared to October 2021. Attendance at points of sale was very impacted by the problems fuel and unfavorable weather. Compared to October 2019, a pre-covid year, the drop in attendance is very sharp (-20.9% in October). Shopping centers and the outskirts are more impacted than city centers with a gap of four to five points.
There are several reasons for concern for the future. The players are experiencing a very significant jaws effect given the increase in their operating costs while the evolution of demand is very uncertain. Very few brands can pass on the increase in their costs in sales prices. The federation therefore asks, among other things, to limit the indexation of the Commercial Rent Index to + 3.5% for the rents of all companies in 2023. It also invokes an absolute emergency: cap the price of energy for 2023 and retroact on contracts already signed to prevent the rate of failures from accelerating.