December 11, 2023

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Abercrombie & Fitch (ANF) Q3 2023 earnings

Abercrombie & Fitch (ANF) Q3 2023 earnings

Abercrombie & Fitch.

Courtesy: Abercrombie & Fitch

Abercrombie & Fitch on Tuesday smashed previous estimates as it reported a 20% jump in sales thanks to a strong back-to-school shopping season and growth at both its namesake brand and Hollister.

The longtime mall retailer, which has rebounded after years of stagnation, also raised its forecasts again as it continues to defy the overall slowdown in the apparel industry.

However, the company’s shares fell more than 5% in pre-market trading. As of Monday’s close, the stock was up 215% over the year.

Here’s what Abercrombie did in its fiscal third quarter compared to what Wall Street expected, based on a survey of analysts conducted by LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.83 against. Expected $1.18
  • he won: $1.06 billion versus $1.06 billion expected $981 million

The company reported net earnings for the three-month period ending October 2018. The stock’s value on September 28 was $96.2 million, or $1.83 per share, compared to a loss of $2.21 million, or 4 cents per share, a year earlier.

Sales rose to $1.06 billion from $880 million a year ago.

For the holiday quarter, Abercrombie expects net sales growth to be in the low double digits compared to the previous year, which is in line with analysts’ expectations for growth of 11.6%, according to LSEG.

It expects its operating margin to be in the range of 12% to 14%, compared with 7.7% in the same period last year, and above expectations of 11.3%, according to StreetAccount. This expected increase is due to a higher gross profit rate, lower shipping costs, and higher sales prices.

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For the full year, the company expects net sales to grow 12% to 14%, up from a previous forecast of about 10% and ahead of the 10.8% rise that analysts expected, according to LSEG. It expects an operating margin of about 10%, up from its previous range of 8% to 9%, which is what analysts expected, according to StreetAccount. The expected increase is due to lower shipping and raw material costs.

During the quarter, Abercrombie saw sales of its namesake brand grow 30% to $548 million, and revenue at Hollister rose 11% to $509 million. Same-store sales were up 16% across both brands.

“Our strong third-quarter results, with net sales and operating margin exceeding our expectations, speak to the strength of our playbook that operates globally across our portfolio of brands,” Fran Horowitz, the company’s CEO, said in a press release. “Going into the important holiday season, our 2023 year-to-date financial results give us confidence in our ability to continue to serve our customers and grow profitably. As such, we are increasing our full-year outlook for both net sales growth and operating margin growth.”

Abercrombie stock has soared this year as the company’s turnaround continues to pay off. For many years, Abercrombie was known for its trademark T-shirts, jeans, and shirtless male models, which led critics to accuse the company of racism and exclusivity.

In the years since Horowitz took over as brand CEO, Abercrombie has transformed itself into a comprehensive retailer with a diverse product lineup that continues to resonate with consumers.

Read the full earnings release here.

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