Major United States retailers delivered mostly upbeat holiday sales results on Monday, yet their stocks declined as Wall Street remained sceptical.
Lululemon, Abercrombie & Fitch, and American Eagle all raised their fourth-quarter outlooks, citing robust holiday performance. Urban Outfitters also reported growth, while Macy’s shared a less optimistic update, anticipating net sales to be at, or slightly below, the low-end of the previously issued range of US$7.8 billion to $8.0 billion.
Lululemon now projects sales between $3.56 billion and $3.58 billion, up from $3.48 billion to $3.51 billion previously forecasted. Adjusted for an extra fiscal week, sales growth is expected between 6% and 7%. The company also raised its earnings per share outlook to $5.81 - $5.85, from $5.56 - $5.64, citing strong holiday demand.
Abercrombie & Fitch slightly increased its holiday quarter sales growth outlook to 7% - 8%, with full-year growth now expected at 15%, consistent with last year’s 16%. However, its stock plummeted 15.7%, reflecting concerns about slowing growth.
American Eagle upgraded its operating profit forecast to $135 million, up from $125 million. Yet, shares fell 4.6% due to anticipated revenue declines from a timing shift in its fiscal calendar, which will result in a $85 million sales impact in the fourth quarter.
Urban Outfitters reported a 10% net sales increase for the two months ending December 31, driven by online growth. Despite this, shares slid 2%.
Macy’s fared worse, with its stock dropping 8.1% following subdued sales guidance.
In the U.K., retailer stocks also faced a sharp selloff amid economic concerns and fallout from Labour’s tax-raising budget.
Tesco shares fell 3.5% last week, while Marks & Spencer dropped 14.3%, despite both reporting strong holiday sales.
Greggs also saw its stock plunge 25.6% due to concerns over weak consumer confidence and rising costs.