New York, US – Abercrombie & Fitch Co. announced a remarkable 21% increase in revenue during its fiscal second quarter, a testament to the apparel company’s continued growth trajectory. The sales surge, following a 16% growth in the same period last year, has prompted the company to provide optimistic guidance for the current quarter. However, the outlook for the full year remains consistent with previous estimates, as the company anticipates a shorter fiscal year compared to the previous one.
CEO Fran Horowitz, known for her confidence in the company’s adaptability to various economic climates, acknowledged a hint of uncertainty in the current economic landscape in the company’s latest earnings report. Despite this, Horowitz expressed confidence in the company’s ability to achieve sustainable and profitable growth through strategic investments in marketing, digital technology, and store enhancements.
Abercrombie’s stock, which has surged nearly 89% this year, experienced a slight dip of about 9% during premarket trading following the earnings report. The company exceeded Wall Street expectations in both earnings per share ($2.50 vs. $2.22 expected) and revenue ($1.13 billion vs. $1.10 billion expected) for the quarter ending Aug. 3, with reported net income of $133 million.
Notably, Abercrombie recorded a significant increase in same-store sales by 18% during the quarter, attributed to strong performance in summer and back-to-school sales. Looking ahead, the company projects a low double-digit percentage increase in sales for the current quarter, surpassing analyst predictions.
Further emphasizing its growth initiatives, Abercrombie raised its full-year sales guidance from 10% to a range of 12% to 13%, aligning closely with analyst forecasts. Despite the shorter fiscal year, the company remains optimistic about its ability to navigate market challenges and maintain its growth momentum.
In a strategic move to diversify its market reach and bolster sales, Abercrombie has focused on international expansion, particularly through its Hollister and Abercrombie Kids brands. Sales at Hollister saw a 17% increase, while comparable sales rose by 15% during the quarter. The company’s ventures in Europe, Middle East, and Africa divisions also saw a notable 16% growth in sales.
Additionally, Abercrombie recently announced a partnership with Haddad Brands to enhance distribution channels for Abercrombie Kids and expand its product line to include infant and toddler categories. This collaboration aims to drive sustainable growth and engage new customers on a global scale, reflecting the company’s commitment to innovative strategies for long-term success.