By Nicholas G. Miller
Shoppers weren't shy about opening their wallets this holiday season despite continued weak consumer sentiment, according to a string of retailers that said Monday they saw strong year-end sales and traffic.
However, shares of Urban Outfitters were 11% lower and Abercrombie & Fitch dropped 16% Monday morning as the teen retailers gave results or guidance that disappointed Wall Street.
Shares of Five Below, which raised its fourth-quarter guidance Monday on the back of strong holiday sales, ticked up 1.2% after dipping earlier. And embattled athletic apparel retailer Lululemon shares rose 3%, also reversing from an earlier slip, after the company said it expects quarterly profit to come in at the higher end of its guidance.
The mixed reactions reflect the continued challenge of parsing the state of consumers, who appear to continue to spend even as their mood toward the economy sours.
Urban Outfitters said it notched record holiday sales while Abercrombie & Fitch said both its Hollister and namesake brands saw strong holiday seasons. The negative stock movements reflected elevated expectations from Wall Street for the retailers.
Urban Outfitters reported 5% growth in comparable retail-segment sales for the fourth quarter, missing analysts' forecast of 5.4%, according to FactSet. Abercrombie & Fitch narrowed its fourth-quarter earnings guidance to between $3.50 and $3.60 a share, compared with its previous forecast of $3.40 to $3.70 a share. Analysts expected $3.61 a share.
Lululemon, which is in the middle of a proxy battle with its founder Chip Wilson, said it expected to achieve the higher end of its prior fourth-quarter net revenue and earnings guidance. The company has struggled to boost sales in recent quarters and Wilson has criticized it for getting away from innovation.
Meanwhile, Five Below, which has sought to simplify its pricing structure to make lower-cost products more obvious to shoppers, raised its fourth-quarter sales and earnings guidance. It said it achieved "strong, broad-based results" during the holiday season.
Companies across various retail sectors have largely said that consumers spent liberally during the holiday season even as consumer sentiment neared all-time lows. Persistent inflation and fears of a weakening job market have sunk consumers' feelings toward the economy and their personal finances.
However, while retailers have reported that some consumers are pulling back on discretionary purchases and looking more carefully for deals, they've also insisted that shoppers largely remain resilient and continue to spend. Upper-income consumers, many of whom have been boosted by a booming stock market, have also picked up the slack for more budget-conscious shoppers, companies have said.
Write to Nicholas G. Miller at nicholas.miller@wsj.com.
(END) Dow Jones Newswires
January 12, 2026 11:45 ET (16:45 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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