Lululemon, Abercrombie Boost Holiday Sales Forecasts Amid Strong Demand

ORLANDO, Fla. — Lululemon Athletica and Abercrombie & Fitch raised their fourth-quarter sales forecasts on Monday, citing strong holiday season demand for discounted apparel. The announcements came ahead of the annual ICR conference, where major U.S. retailers often share early holiday results and meet with investors.

Lululemon now expects sales to grow between 11% and 12%, reaching $3.56 billion to $3.58 billion, up from its previous forecast of $3.48 billion to $3.51 billion. Excluding an additional fiscal week in 2024, the company anticipates a 6% to 7% sales increase. Lululemon also raised its profit outlook, forecasting earnings per share of $5.81 to $5.85, compared to earlier guidance of $5.56 to $5.64.

“During the holiday season, our guests responded well to our product offering, enabling us to increase our fourth-quarter guidance,” said Meghan Frank, Lululemon’s chief financial officer, in a statement. Shares of Lululemon rose about 3% in premarket trading following the announcement.

Abercrombie & Fitch also revised its outlook, projecting net sales growth of 7% to 8%, up from its previous range of 5% to 7%. The company expects full-year sales to grow 15%, slightly above its prior estimate of 14% to 15%. However, Abercrombie’s shares fell nearly 8% as investors questioned whether its rapid growth is slowing.

“Following an expected two years of double-digit top and bottom-line growth, I am as confident as ever in the power of our brands and operating model,” said Abercrombie CEO Fran Horowitz. “In 2025, we will look to continue sustainable, profitable growth through the execution of our playbooks to win and retain customers around the world.”

The holiday season saw intense competition among retailers, with apparel discounts averaging 33% in the U.S., according to Salesforce data. While Lululemon benefited from its focus on new styles and full-price selling, Abercrombie maintained its margin forecast, reflecting the challenges of steep promotions.

Other retailers also shared early holiday results. Urban Outfitters reported a 10% increase in net sales for the two months ended Dec. 31, driven by strong online sales. However, its namesake banner saw a 4% decline in comparable sales, while Anthropologie and Free People posted gains of 10% and 9%, respectively. Urban’s rental service, Nuuly, saw sales soar 55% due to a 53% increase in subscribers.

Meanwhile, Macy's struggled during the holiday season, with sales expected to be at or slightly below the low end of its $7.8 billion to $8.0 billion forecast. Shares of Macy’s fell more than 3% in premarket trading.

The National Retail Federation had predicted modest holiday sales growth, and early data suggests the season may have been stronger than expected. Mastercard SpendingPulse reported a 3.1% increase in U.S. retail sales, excluding automotive, from Nov. 1 through Dec. 24.

The ICR conference, held in Orlando, brings together major retailers, investors, and analysts to discuss performance and set the tone for consumer trends in the new year.