Concerns regarding holiday-quarter sales from major retailers have overshadowed the positive third-quarter results and annual forecasts of Abercrombie & Fitch and American Eagle Outfitters (AEO). Abercrombie & Fitch saw its shares decline approximately 8 per cent, while AEO experienced a more significant decrease of 17 per cent.

Retailers attribute this downturn to cautious spending by consumers amid rising inflation and surging interest rates. Major players like Best Buy, Kohl’s, and Lowe’s have all reported lackluster quarterly results. Rachel Wolff, Senior Analyst at Insider Intelligence, notes this trend has led investors to question retailers' ability to sustain their growth figures.

Analysts at Citi Research anticipate Abercrombie's net sales during the fourth quarter to align with market expectations, with the brand projecting a low-double digit net sales growth of 11.6 per cent, according to LSEG data.

In contrast, AEO expresses optimism about holiday-quarter sales, anticipating them to surpass market expectations. The brand expects fourth-quarter revenues to increase in high single digits, a notable improvement from the earlier estimate of 3.64 per cent.