Led by double-digit sales growth at Hollister, Abercrombie & Fitch (ANF) reported their 12th consecutive quarter of revenue growth, setting a new record and beating Wall Street’s expectations.
Shares were launched more than 17% higher on the results, giving a lift to Gap (GAP), American Eagle (AEO), and Urban Outfitters (URBN).
“We remain on track toward record net sales for fiscal 2025, on the foundation of consistent quarterly top-line growth, top-tier profitability, and healthy cash flow. Our results reinforce the strength of our operating model and give us confidence in our ability to drive sustainable, long-term shareholder value,” said CEO Fran Horowitz.
The retailer earned an adjusted profit of $2.36 per share, down 4% from a year ago but $0.21 better than expected. With operating income declining 13% from the same quarter last year, the company’s operating margin was down 280 basis points to 12.0%.
However, sales were up from a year ago to $1.3B, beating estimates by $10M, led by strength in the Americas and EMEA, both of which realized a 7% increase in net sales, offsetting a 6% drop in APAC.
Company-wide comparable sales were up 3% on a 4% increase in the Americas, 2% gain in EMEA, and 12% decline in APAC.
By brand, Hollister outperformed with back-to-school fueling a 15% gain in comparable stores sales, more than offsetting a 7% drop in sales at the company’s Abercrombie brand.
For the year, Abercrombie & Fitch (ANF) now expects net sales growth of 6% to 7% compared to the previous range of up 5% to 7%. Net income is seen between $10.20 and $10.50 per share, narrowed from $10.00 and $10.50 per share, and above the consensus estimate of $9.68 per share.
Operating margin guidance remains unchanged at 13.0% to 13.5%.
Additionally, the company now expects to repurchase ~$450M shares in FY25 versus an earlier projection of ~$400M.