Abercrombie & Fitch's Outlook Soars with 20% Quarterly Sales Surge
Abercrombie & Fitch's Outloo...
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Abercrombie & Fitch's Outlook Soars with 20% Quarterly Sales Surge

21 November 2023
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2 min.
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Abercrombie & Fitch's Outlook Soars with 20% Quarterly Sales Surge

Breaking Expectations

Abercrombie and Fitch is on a triumphant rebound, defying industry slowdowns with a remarkable 20% surge in sales.

This stellar performance, driven by a robust back-to-school shopping season and notable growth in both its flagship brand and Hollister, has propelled the longtime mall retailer to exceed market expectations. Despite a more than 5% premarket drop in shares, the stock has soared an astounding 215% for the year as of Monday's close.

In the fiscal third quarter, Abercrombie reported a net income of $96.2 million, or $1.83 per share, a significant turnaround from the $2.21 million loss a year earlier. Sales also experienced a substantial uptick, reaching $1.06 billion compared to $880 million in the same period last year.

Looking ahead to the holiday quarter, Abercrombie anticipates continued growth with expectations of low double-digit net sales increase and an operating margin ranging from 12% to 14%, surpassing the prior year's 7.7% and expectations of 11.3%. This positive outlook is attributed to a higher gross profit rate, reduced freight costs, and increased sales prices.

For the full year, Abercrombie now projects net sales growth between 12% to 14%, up from the previous estimate of around 10%, outpacing the 10.8% uptick anticipated by analysts. The forecasted operating margin is around 10%, up from the prior range of 8% to 9%, aligning with analyst expectations. Lower freight and raw material costs are cited as key factors contributing to this expected increase.

Fran Horowitz, Abercrombie's CEO, expressed confidence in the company's trajectory, citing the transformative power of their playbook globally across the brand portfolio.

Horowitz highlighted the impressive sales and operating margin in the third quarter, indicating a strong foundation for continued customer satisfaction and profitable growth. This optimism is grounded in Abercrombie's evolution from a brand associated with controversy into an inclusive retailer with a product assortment that resonates with modern consumers.

The impressive stock surge in 2023 attests to the success of this transformation and positions Abercrombie and Fitch as a resilient and forward-thinking player in the retail industry.

Persons1 and Companies2 in the news

Chief Executive Officer of Abercrombie & Fitch Co.
1 place
Hollister Co.
1 place
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