Abercrombie & Fitch raises outlook after quarterly sales surge 20%

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Abercrombie & Fitch.

Courtesy: Abercrombie & Fitch

Abercrombie & Fitch connected Tuesday blew past estimates arsenic it posted a 20% leap successful income acknowledgment to a beardown back-to-school buying play and maturation astatine some its namesake marque and Hollister. 

The longtime promenade retailer, which has bounced backmost aft years of stagnation, besides raised its outlook again arsenic it continues to defy an wide slowdown crossed the apparel industry. 

Shares of the institution fell much than 5% successful premarket trading, however. Through Monday's close, the banal was up 215% connected the year.

Here's however Abercrombie did successful its fiscal 3rd 4th compared with what Wall Street was anticipating, based connected a survey of analysts by LSEG, formerly known arsenic Refinitiv:

  • Earnings per share: $1.83 vs. $1.18 expected
  • Revenue: $1.06 cardinal vs. $981 cardinal expected

The company's reported nett income for the three-month play that ended Oct. 28 was $96.2 million, oregon $1.83 per share, compared with a nonaccomplishment of $2.21 million, oregon 4 cents per share, a twelvemonth earlier. 

Sales roseate to $1.06 cardinal from $880 cardinal a twelvemonth earlier. 

For its vacation quarter, Abercrombie expects nett income maturation to beryllium up debased double-digits compared to the anterior year, which is successful enactment with the 11.6% maturation analysts had expected, according to LSEG. 

It expects its operating borderline to beryllium successful the scope of 12% to 14%, compared to 7.7% successful the twelvemonth agone play and up of expectations of 11.3%, according to StreetAccount. The expected uptick is driven by a higher gross nett rate, little freight costs and higher income prices. 

For the afloat year, the institution expects nett income to turn betwixt 12% to 14%, up from a erstwhile outlook of astir 10% and up of the 10.8% uptick that analysts had expected, according to LSEG. It's forecasting an operating borderline of astir 10%, up from its erstwhile scope of 8% to 9%, which is what analysts had expected, according to StreetAccount. The expected summation is driven by little freight and earthy worldly costs. 

During the quarter, Abercrombie saw income astatine its namesake marque turn by 30% to $548 cardinal and gross astatine Hollister turn by 11% to $509 million. Same store income were up 16% crossed some brands.

"Our beardown 3rd 4th results, with nett income and operating borderline well-exceeding our expectations, talk to the powerfulness of our playbook moving globally crossed our marque portfolio," CEO Fran Horowitz said successful a quality release. "Entering the important vacation season, our fiscal 2023 year-to-date results springiness america the assurance that we tin proceed to present for our customers and thrust profitable growth. As such, we are expanding our afloat twelvemonth outlook for some nett income maturation and operating margin." 

Abercrombie's banal has soared this twelvemonth arsenic the company's transformation continues to carnivore fruit. For years, Abercrombie was known for its branded t-shirts and jeans and shirtless antheral models, which successful crook prompted critics to impeach the institution of racism and exclusivity.

In the years since Horowitz took implicit arsenic the brand's CEO, Abercrombie has transformed itself into an inclusive retailer with a merchandise assortment that continues to resonate with consumers.

Read the afloat net merchandise here.