Abercrombie & Fitch said Wednesday that its holiday-quarter sales jumped 21% and its profit grew thanks to higher prices and lower raw material costs.
The apparel retailer expects its growth story will continue as it issued better-than-expected sales guidance.
Here’s how Abercrombie did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: $2.97 vs. $2.83 expected
- Revenue: $1.45 billion vs. $1.43 billion expected
The company’s reported net income for the three-month period that ended Feb. 3 was $158.4 million, or $2.97 per share, compared with $38.33 million, or 75 cents per share, a year earlier.
Sales rose to $1.45 billion, up about 21% from $1.2 billion a year earlier.
For the current quarter, Abercrombie expects sales to rise by a low double-digit percentage, compared with estimates of up 7.2%, according to LSEG. For the full year, its anticipates sales will grow between 4% and 6%, compared with estimates of 4%, according to LSEG.
Chief Financial Officer and Chief Operating Officer Scott Lipesky said on a call with analysts that he expects growth to be tempered in the second half of the year compared to the first.
“While we expect growth in both the first and second halves of the year, we expect the rate of growth will be higher in the first half, partially due to calendar shifts stemming from the 53rd week” in the fiscal 2023 calendar, said Lipesky. “We expect a full year operating margin around 12%.”
During the quarter, comparable sales grew 16% and gross margin came in at 62.9%, 7.2 percentage points higher than the year ago period. Higher average selling prices plus lower freight and raw material costs boosted profit. Analysts had expected Abercrombie’s gross margin to be 60.1%, according to StreetAccount.
Lipesky noted that cotton costs during the quarter were “relatively consistent” with 2022 levels. Going forward, he expects those lower input costs…
Read the full article here
