Abercrombie & Fitch (NYSE: ANF) reported Q1 EPS of ($0.27), $0.35 worse than the analyst estimate of $0.08. Revenue for the quarter came in at $813 million versus the consensus estimate of $799.31 million.

Fiscal 2022 Full Year Outlook:

To more closely align with industry practices, and the company’s plans to flex operating expenses in response to volatility in freight and other costs, beginning this quarter, the company will no longer provide a full year outlook on gross profit rate or operating expense. The following outlook replaces all previous full year guidance. For fiscal 2022, the company now expects:

• Net sales to be flat to up 2% from $3.7 billion in 2021, down from previous outlook of up 2 to 4% driven by a combined 200 basis point adverse impact from foreign currency and an assumed inflationary impact on consumer demand, partially offset by higher-than-expected sales in Q1.
• Operating margin in the range of 5 to 6%, down from previous outlook of 7 to 8% reflecting a combined 200 basis point adverse impact from higher freight and raw material costs, foreign currency, and lower sales due to an assumed inflationary impact on consumer. Mitigating these factors will be actions to drive AUR growth, reduce certain expenses, and adjust inventory flows by region in response to current market forces.
• Effective tax rate to be in the mid-30s.
• Capital expenditures of approximately $150 million.

Fiscal 2022 Second Quarter Outlook

Consistent with the above, beginning this quarter, the company will no longer provide a quarterly outlook on gross profit rate or operating expense. For the second quarter of fiscal 2022, the company expects:

• Net sales to be down low-single-digits to fiscal second quarter 2021 level of $865 million, reflecting a combined, estimated adverse impact of approximately 300 basis points from foreign currency and COVID-related lockdowns in China and approximately 300 basis points due to an assumed impact of inflationary impact on consumer demand.
• Operating margin in the range of 3 to 4% with the year-over-year decline driven by higher freight and raw material costs.
• Effective tax rate to be in the mid-to-high 30s.

For earnings history and earnings-related data on Abercrombie & Fitch (ANF) click here.