The throne will not be relinquished anytime soon by Abercrombie & Fitch.
Following another quarter of earnings that exceeded expectations and its sixth consecutive quarter of double-digit sales growth, the clothing manufacturer released solid Christmas guidance on Tuesday. Results did not seem to be impacted by Mike Jeffries, the company’s former CEO, being arrested recently on sex trafficking allegations.
According to an LSEG survey of analysts, Abercrombie’s fiscal third quarter performance was as follows in relation to what Wall Street was expecting:
- Earnings per share: $2.50 as opposed to the anticipated $2.39
- Revenue: $1.21 billion as opposed to the anticipated $1.19 billion
Compared to $96.2 million, or $1.83 per share, a year earlier, the company’s reported net income for the three months ending November 2 was $131.98 million, or $2.50 per share.
Sales increased from $1.06 billion to $1.21 billion, a 14% increase from the previous year.
According to LSEG, Abercrombie anticipates sales growth of 5% to 7% for the crucial Christmas shopping quarter, which is more than the 4.8% rise experts had anticipated. Instead of the 12% to 13% increase it had previously projected, the business is now anticipating a 14% to 15% increase in revenues for the entire year.
According to LSEG, the revised projection is greater than the 12.1% rise experts had anticipated. Abercrombie’s stock fell almost 3% in premarket trade, even though the company’s projection was stronger than anticipated.
CEO Fran Horowitz expressed optimism in a news statement, omitting the worries she had voiced about the “increasingly uncertain environment” during the previous quarter.
“By utilizing our regional playbooks and operational model, we continue to execute at a high level with broad-based growth across areas and brands. Every one of our regions had double-digit growth throughout the quarter, with the Americas expanding by 14%, EMEA by 15%, and APAC by 32%, according to Horowitz.
Comparable sales gains of 11% and 21% were reported by the Abercrombie and Hollister brands, respectively. Horowitz cited last year’s impressive results, which included 7% increase for Hollister and 26% growth for Abercrombie.
Abercrombie has grown to be one of the largest successes in the retail sector under Horowitz’s leadership. It continues to improve on the impressive performance it recorded the previous year.
Horowitz is seeking expansion in foreign areas in order to maintain its momentum. Abercrombie has also ventured into new markets, as seen by their recent NFL relationship and wedding line.
Additionally, it is working to expand its Hollister chain, which appeals to Gen Z consumers, and make sure the brand stands apart from Abercrombie, which appeals to millennials. Hollister had a 14% increase in sales during the quarter, which accounted for over half of total revenue.]
President-elect Donald Trump’s win seems to have lifted some of the gloomy mood that hung over the second half of the year as shops prepare for Black Friday and the rest of the holiday shopping season.
For instance, Abercrombie and Dick’s Sporting Goods, both of which released their profits on Tuesday, had expressed caution in their summer quarterly reports, but now that the election is done, they are hopeful.
Since Trump’s victory, consumer mood has increased, and economists believe that spending will benefit from the certainty of the election outcome, regardless of the winner.
