ANF Reports Q2 2023 Earnings for Abercrombie & Fitch

Shares of Abercrombie & Fitch soared on Wednesday after the company exceeded Wall Street’s expectations for quarterly earnings and sales. CEO Fran Horowitz attributed the strong performance to the retailer’s efforts in attracting more customers with a diverse range of fashionable options beyond jeans and T-shirts. Horowitz also emphasized the company’s commitment to opening new stores and enhancing its digital experience. Here are the results for Abercrombie’s fiscal second quarter ended July 29:

• Earnings per share: $1.10 (vs. analyst expectations of 17 cents)
• Revenue: $935.3 million (vs. analyst expectations of $842.4 million)

The company’s shares closed more than 23% higher on Wednesday. Net income for the quarter was $56.9 million, or $1.10 per share, compared to a loss of $16.8 million, or 33 cents per share, in the same period last year. Net sales also rose from $805.1 million in the previous year.

Abercrombie now anticipates a 10% increase in net sales for the full fiscal year, up from $3.7 billion in the prior year. The company expects operating margins to improve and be in the range of 8% to 9%, compared to the previous expectation of 5% to 6%.

Abercrombie’s success can be attributed to its successful rebranding efforts, which have attracted a wider audience. Unlike other retailers experiencing declining sales, Abercrombie has experienced significant growth by offering clothing that appeals to a broader customer base. The company’s shares have surged approximately 121% this year, outperforming the S&P 500.

Abercrombie has also focused on boosting sales for its Hollister brand, targeting a younger demographic. The company has ramped up digital campaigns for Hollister and reported improved customer traffic and sales growth. Comparable sales across the company increased by 13%, with Abercrombie’s comparable sales soaring by 23% and Hollister’s rising by 5% year over year.

Inventory decreased by 30% year over year as the company carefully managed orders based on demand. Horowitz highlighted strong sales in women’s apparel, particularly dresses and pants, as well as in men’s apparel, with knit tops and pants being popular choices. Abercrombie also celebrated the opening of a new store on New York City’s Fifth Avenue and revealed plans for store openings, remodels, and closures.