By Dhirendra Tripathi
Investing.com – Abercrombie & Fitch Company (NYSE:) stock slumped 14% Tuesday as its profitability declined in the three months ended October 30 and the retailer warned of production and delivery delays and elevated costs in the ongoing quarter.
Analysts expected a better outlook at the start of the holiday season but the prospects of further reopening and return to office also marred the sentiment for the retailer of casual wear.
Supply chain costs eroded the company’s gross profit rate in the third quarter by 30 basis points year-on-year to around 64%. The company blamed this on freight inflation and efforts to offset supply chain issues.
The company’s board approved a share repurchase of $500 million but that did little to slow the fall in the stock price.
Digital net sales rose 8% from last year and contributed 46% of total third quarter sales of $905 million, which grew 10%.
Chief Executive Officer Fran Horowitz said the start of the holiday season has been promising and customers have come out early to shop and are responding well to assortments.
Profit per share of 86 cents beat estimates.
