Dive Transient:
- Abercrombie & Fitch Co.’s third-quarter internet gross sales have been $1.2 billion, up 14% from a 12 months in the past, the corporate stated in a Tuesday press launch. Comparable gross sales rose 16%, whereas internet earnings for the quarter was $133.9 million, up 37% from $97.7 million the prior 12 months.
- By model, Abercrombie’s internet gross sales rose 15% from a 12 months in the past to $629.8 million, with comps rising 11%. The corporate’s Hollister manufacturers noticed comps rise 21% and a 14% year-over-year rise in internet gross sales to $579.1 million. By the top of the 12 months, the corporate plans to open 60 new shops (about 40 Abercrombie and 20 Hollister), shut 40 places, and full 60 remodels and rightsizes.
- The corporate on Tuesday additionally introduced the promotion of Robert Ball, the corporate’s senior vp of company finance, investor relations and treasury, to chief monetary officer. Ball took over CFO duties on Nov. 20 from Chief Working Officer Scott Lipesky, who had held the CFO position from 2017 to 2023 earlier than taking over his present position. Ball will proceed to report back to Lipesky.
Dive Perception:
During the last 12 months, Abercrombie & Fitch Co. has constantly delivered sturdy monetary efficiency. In Could, the corporate reported internet gross sales of $1 billion, which was the very best first-quarter internet gross sales in its historical past. The corporate sustained that momentum in Q2, reporting internet gross sales of $1.1 billion and comp development of 18%.
It’s noteworthy that Abercrombie sustained its gross sales and earnings momentum regardless of a backdrop of weather-related disruptions within the type of hurricanes and flooding throughout Q3, William Blair analysts led by Dylan Carden stated in a Tuesday word.
“Earnings have been once more a brilliant spot, although we’re seeing some indicators of fatigue right here,” Carden stated. “Whole gross margin of 65.1% was up 20 foundation factors from final 12 months and 60 foundation factors higher than expectations.”
Nevertheless, after seeing bigger gross margin beneficial properties by the primary half of the 12 months, Carden famous Abercrombie’s expectation of extra tempered development in the course of the the rest of the 12 months.
CEO Fran Horowitz stated Q3’s top- and bottom-line outcomes beat the corporate’s expectations. Moreover, the corporate noticed broad-based gross sales development throughout areas, manufacturers and genders pushed by sturdy visitors. Abercrombie decreased promotions in comparison with final 12 months, driving development in unit promoting and common unit retail in the course of the quarter.
“We proceed to see balanced development throughout classes, giving our clients a gentle stream of newness and selection,” Horowitz stated, based on an earnings name transcript. “This wholesome top-line efficiency, enabled by our closeness to the shopper, additionally drove a gross revenue fee of 65.1%, the very best third-quarter gross revenue fee since 2010.”
The corporate raised its full-year outlook because of the sturdy quarter, now anticipating internet gross sales to develop between 14% and 15%, in comparison with 12% to 13% beforehand.
Ball, the incoming CFO, joined the corporate in 2003. He has held a number of finance management positions throughout his tenure, together with chief monetary officer of the Abercrombie & Fitch and Abercrombie Children manufacturers.
Horowitz stated Ball has labored intently together with her and the manager management workforce to advance the corporate’s transformation and turnarounds. “Along with his a long time of expertise on the firm, Robert is uniquely certified to have a right away affect as he continues to assist drive our methods ahead,” Horowitz stated in a press release.
