Abercrombie & Fitch (ANF) earnings Q3 2023

Abercrombie & Fitch on Tuesday blew previous estimates because it posted a 20% bounce in gross sales due to a robust back-to-school purchasing season and progress at each its namesake model and Hollister. 

The longtime mall retailer, which has bounced again after years of stagnation, additionally raised its outlook once more because it continues to defy an general slowdown throughout the attire business. 

Shares of the corporate fell greater than 5% in premarket buying and selling, nevertheless. Via Monday’s shut, the inventory was up 215% on the yr.

This is how Abercrombie did in its fiscal third quarter in contrast with what Wall Road was anticipating, based mostly on a survey of analysts by LSEG, previously often called Refinitiv:

• Earnings per share: $1.83 vs. $1.18 anticipated
• Income: $1.06 billion vs. $981 million anticipated

The corporate’s reported web earnings for the three-month interval that ended Oct. 28 was $96.2 million, or $1.83 per share, in contrast with a lack of $2.21 million, or 4 cents per share, a yr earlier. 

Gross sales rose to $1.06 billion from $880 million a yr earlier. 

For its vacation quarter, Abercrombie expects web gross sales progress to be up low double-digits in comparison with the prior yr, which is in step with the 11.6% progress analysts had anticipated, based on LSEG. 

It expects its working margin to be within the vary of 12% to 14%, in comparison with 7.7% within the yr in the past interval and forward of expectations of 11.3%, based on StreetAccount. The anticipated uptick is pushed by the next gross revenue price, decrease freight prices and better gross sales costs. 

For the total yr, the corporate expects web gross sales to develop between 12% to 14%, up from a earlier outlook of round 10% and forward of the ten.8% uptick that analysts had anticipated, based on LSEG. It is forecasting an working margin of round 10%, up from its earlier vary of 8% to 9%, which is what analysts had anticipated, based on StreetAccount. The anticipated improve is pushed by decrease freight and uncooked materials prices. 

Throughout the quarter, Abercrombie noticed gross sales at its namesake model develop by 30% to $548 million and income at Hollister develop by 11% to $509 million. Identical retailer gross sales have been up 16% throughout each manufacturers.

“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,” CEO Fran Horowitz mentioned in a information launch. “Coming into the vital vacation season, our fiscal 2023 year-to-date outcomes give us the arrogance that we will proceed to ship for our clients and drive worthwhile progress. As such, we’re growing our full yr outlook for each web gross sales progress and working margin.” 

Abercrombie’s inventory has soared this yr because the company’s transformation continues to bear fruit. For years, Abercrombie was recognized for its branded t-shirts and denims and shirtless male fashions, which in flip prompted critics to accuse the corporate of racism and exclusivity.

Within the years since Horowitz took over because the model’s CEO, Abercrombie has remodeled itself into an inclusive retailer with a product assortment that continues to resonate with shoppers.

Learn the total earnings launch here.