Abercrombie & Fitch Posts One other Stable Quarter – WWD

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Abercrombie & Fitch Posts One other Stable Quarter – WWD

News Author

Abercrombie & Fitch Co. continued its profitable methods by posting stable third-quarter outcomes beating its expectations.

For the third quarter ended Oct. 28, the youth specialty retailer reported web earnings of $96.2 million, or $1.83 per share on a reported foundation as in comparison with web loss per diluted share final yr of 4 cents and web earnings per diluted share of 1 cent on a reported and adjusted non-GAAP foundation, respectively.

Internet gross sales reached $1.1 billion, up 20 % as in comparison with final yr on a reported foundation and up 19 % on a relentless forex foundation. Whole firm comparable gross sales had been up 16 %.

The outcomes sparked a 6.6 % or $4.79 spike within the inventory worth to $69.94 in pre-market buying and selling round 8:15 a.m. Tuesday.

“Our robust third quarter outcomes, with web gross sales and working margin well-exceeding our expectations, communicate to the ability of our playbook working globally throughout our model portfolio,” Fran Horowitz, A&F’s chief govt officer mentioned in a press release. “Internet gross sales progress of 20 % accelerated from the second quarter and was as soon as once more led by Abercrombie manufacturers with distinctive progress of 30 %. At Hollister manufacturers, we had a stable back-to-school season, delivering 11 % web gross sales progress for the quarter as our assortment and model evolution is resonating with our teen buyer. With robust product acceptance and tightly-controlled inventories throughout manufacturers, we delivered gross revenue fee enlargement of 570 foundation factors to final yr along with international gross sales progress. Operationally, we made investments in expertise, advertising and marketing and our individuals whereas delivering robust year-over-year working leverage leading to an working margin of 13.1 % for the quarter.

“Getting into the vital vacation season,” Horowitz added, “our fiscal 2023 year-to-date outcomes give us the boldness that we are able to proceed to ship for our prospects and drive worthwhile progress. As such, we’re rising our full-year outlook for each web gross sales progress and working margin.”

For the complete yr, A&F now expects web gross sales progress of 12 to 14 % from $3.7 billion in 2022, in comparison with the earlier outlook of progress of round 10 %. Additionally, fiscal 2023 features a 53rd week for reporting functions, together with web retailer enlargement. The 53rd week is estimated so as to add roughly $45 million to complete web gross sales within the fourth quarter and full yr of 2023.

Working margin is now seen round 10 % in comparison with the earlier outlook within the vary of 8 to 9 %. The present outlook features a good thing about round 250 foundation factors from full yr 2022 ranges on anticipated web enchancment in freight and uncooked materials prices, and modest working expense leverage with gross sales progress anticipated to greater than offset larger bills.

For the fourth quarter, web gross sales progress is seen up low double-digits in comparison with fiscal fourth quarter 2022 stage of $1.2 billion. Included on this outlook is the anticipated profit of roughly 375 foundation factors from the 53rd monetary reporting week.

Working margin is seen within the within the vary of 12 to 14 % in comparison with an adjusted working margin of seven.7 % in This autumn 2022. “We anticipate the year-over-year enchancment to be pushed by the next gross revenue fee on decrease freight prices and better AURs,” the corporate indicated.