Abercrombie & Fitch isn’t giving up its crown anytime quickly.
The attire firm issued sturdy vacation steerage on Tuesday after posting its sixth straight quarter of double-digit gross sales progress and one other quarter of outcomes that topped expectations. The current arrest of the corporate’s former CEO, Mike Jeffries, on expenses of intercourse trafficking didn’t seem to have an effect on outcomes.
Here’s how Abercrombie did in its fiscal third quarter in contrast with what Wall Street was anticipating, based mostly on a survey of analysts by LSEG:
- Earnings per share: $2.50 vs. $2.39 anticipated
- Revenue: $1.21 billion vs. $1.19 billion anticipated
The firm’s reported internet earnings for the three-month interval that ended Nov. 2 was $131.98 million, or $2.50 per share, in contrast with $96.2 million, or $1.83 per share, a 12 months earlier.
Sales rose to $1.21 billion, up round 14% from $1.06 billion a 12 months earlier.
For the all-important vacation purchasing quarter, Abercrombie is anticipating gross sales progress of 5% to 7%, forward of the 4.8% progress that analysts had anticipated, in accordance with LSEG. For the complete 12 months, the corporate is anticipating gross sales to rise between 14% and 15%, larger than the 12% to 13% vary it beforehand anticipated. That new outlook is larger than the 12.1% progress analysts had anticipated, in accordance with LSEG.
Despite the better-than-expected steerage, Abercrombie shares dropped about 3% in premarket buying and selling.
In a information launch, CEO Fran Horowitz struck a constructive be aware, leaving out the considerations she’d talked about within the earlier quarter in regards to the “more and more unsure atmosphere.”
“With broad-based progress throughout areas and types, we proceed to execute at a excessive degree, leveraging our regional playbooks and working mannequin. Each of our areas grew double-digits within the quarter, with the Americas rising 14%, EMEA rising 15% and APAC rising 32%,” stated Horowitz.
The Abercrombie and Hollister manufacturers posted comparable gross sales progress of 11% and 21%, respectively. Horowitz famous the sturdy performances lapped progress of 26% for Abercrombie and seven% for Hollister final 12 months.
Under Horowitz’s route, Abercrombie has develop into one of many retail trade’s largest winners. As it laps the sturdy efficiency it posted final 12 months, it’s persevering with to construct on these numbers.
To preserve gaining momentum, Horowitz is trying to worldwide markets for progress. Abercrombie has additionally gone into new classes, reminiscent of its wedding ceremony assortment and up to date partnership with the NFL. It’s additionally centered on growing its Hollister chain, which caters to Gen Z buyers, and guaranteeing the model is differentiated from Abercrombie, which caters to millennials.
During the quarter, gross sales at Hollister had been up 14%, accounting for practically half of all income.
As retailers gear up for Black Friday and the period of the vacation purchasing season, it seems as if a few of the dim sentiment clouding the again half of the 12 months has evaporated after President-elect Donald Trump’s victory.
For instance, Abercrombie and Dick’s Sporting Goods — which each reported earnings on Tuesday — struck cautious tones when reporting earnings over the summer season, however that sentiment was changed with bullishness now that the election is over.
Consumer sentiment has improved since Trump’s election and analysts are hopeful that certainty within the election outcomes — no matter who gained — shall be a boon for spending.