Catenaa, Monday, January 12, 2026- Abercrombie & Fitch shares sank over 18% after holiday sales disappointed investors, helping spark a selloff in retail stocks.
The New Albany, Ohio-based company didn’t raise its outlook and now expects fourth-quarter sales growth of around 5%, the midpoint of its prior range.
The update came ahead of the ICR Conference taking place this week in Orlando. Other mall-based retailers, including American Eagle Outfitters and Urban Outfitters, also put out holiday results that underwhelmed Wall Street.
The performance of US retailers surprised to the upside for much of last year, with consumers continuing to spend despite rising costs and worries about the economy. But now that positive sentiment appears to be fading.
Shares of Abercrombie had jumped 90% since the company reported strong third-quarter results in November. But they plummeted over 18% on Monday. American Eagle and Urban Outfitters also sank.
Expectations were high after teen brands appeared to be the big winners on Black Friday as discerning shoppers focused on trends and value.
Abercrombie had raised the low end of its annual forecast two months ago, boosted by strong back-to-school demand.
While the company said holiday sales were “strong” at both its Hollister and Abercrombie brands, Monday’s update suggests that growth is moderating after years of momentum.
Lululemon Athletica appeared to be a bright spot, with the retailer saying fourth-quarter sales would be at the higher end of its guidance. But the stock gave up premarket gains and was little changed.
The yogawear chain is under a lot of scrutiny, with results weakening amid more competition. Its chief executive officer is also poised to step down amid pressure from Chip Wilson, Lululemon’s founder, and Elliott Investment Management.
