Abercrombie & Fitch, Dollar Tree Q4 Revenues Miss Estimates

U.S. retailers Abercrombie & Fitch Co. (ANF) and Dollar Tree Inc. (DLTR) on Wednesday reported results for the fourth quarter, with results at Abercrombie & Fitch missing analysts’ estimates, while profit at Dollar Tree surpassed analysts’ expectations, but quarterly revenues missed them.

Abercrombie & Fitch initiated net sales guidance for the full-year 2022, in line with estimates, while Dollar Tree initiated earnings guidance in line, while evenue outlook was below estimates.

Specialty retailer Abercrombie & Fitch reported net income attributable to the company of $65.51 million or $1.12 per share, down from $82.39 million or $1.27 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $1.14 per share, compared to $1.50 per share in the year-ago quarter.

Net sales for the quarter grew 4 percent to $1.16 billion from $1.12 billion in the same quarter last year.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.27 per share on revenues of $1.18 billion for the quarter. Analysts’ estimates typically exclude special items.

Hollister brand sales were up 2 percent to $668.78 million and Abercrombie brand sales grew 6 percent to $492.58 million from last year.

Sales in the U.S. grew 7 percent to $841.69 million, while international sales declined 4 percent to $319.67 million from last year.

Looking ahead, the company now projects net sales growth in the low-single-digits for the first quarter from last year’s $781 million and 2 to 4 percent for the full-year 2022 from last year’s $3.7 billion.

The Street is looking for net sales $799.96 million for the quarter and net sales growth of 2.7 percent to $3.83 billion for the year.

Meanwhile, Dollar Tree reported that net income declined to $454.2 million or $2.01 per share from $502.8 million or $2.13 per share in the prior-year quarter. Net sales for the quarter grew 4.6 percent to $7.08 billion from $6.77 billion in the same quarter last year. Same-Store Sales were up 2.5 percent.

The Street expected the company to report earnings of $1.77 per share on revenues of $7.12 billion for the quarter.

Net sales at Family Dollar stores increased to $3.92 billion from $3.71 billion, with same-store sales growth 1.7 percent, and net sales at Dollar Tree stores grew to $3.16 billion from $3.06 billion, with same-store sales growth 3.1 percent

Gross margin for the quarter contracted 160 basis points, driven by higher freight costs and recall-related markdowns, partially offset by improved initial mark-on and favorable product mix, reduced shrink and leverage on distribution costs.

The company said it recently completed a successful conversion to a $1.25 price point across all Dollar Tree stores in the U.S., more than two months ahead of schedule, which significantly enhances its ability to provide a meaningful assortment at extreme value to shoppers.

Looking ahead to the first quarter, the company estimates earnings in a range of $1.95 to $2.10 per share on consolidated net sales between $6.63 billion and $6.78 billion, based on a low single-digit increase in same-store sales for the combined enterprise.

Analysts expect the company to report earnings of $1.66 per share on sales of $6.80 billion for the quarter.

For fiscal 2022, the company now projects earnings in a range of $7.60 to $8.00 per share on consolidated net sales between $27.22 billion and $27.85 billion, based on a low-to-mid single-digit increase in same-store sales and about 2.8 percent square footage growth.

The Street is looking for earnings of $7.60 per share on sales of $28.04 billion for the year.

The Company plans to open 590 new stores and to renovate 800 Family Dollar stores in fiscal 2022, consisting of 190 Dollar Tree stores and 400 Family Dollar stores. Approximately 350 of the new Family Dollar stores will be in the Combo Store format. Additionally, the Company plans to expand the $3 and $5 Plus assortment to more than 1,500 Dollar Tree stores.

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