Abercrombie & Fitch earnings blow past estimates; off to strong start in Q3
Abercrombie & Fitch reported second-quarter earnings that crushed analysts estimates and said its momentum was continuing in the third quarter.
The apparel retailer reported that its net income rose to $108.5 million, or $1.69 per share, in the quarter ended July 31, up from $5.46 million, or $0.9 per share, in the year-ago quarter. Adjusted earnings were $1.70 per share. Analysts had expected the company to earn $0.72 per share.
Operating income totaled $115 million and $116 million on a reported and adjusted basis, compared to operating income of $14 million and $22 million in last year’s quarter. Abercrombie said its operating income was the best since 2008
Total net sales jumped 24% to $865 million, missing estimates of $879.2 million, from $698.3 million in the year-ago quarter. Sales were up 3% percent from the pre-pandemic second-quarter of 2019. Digital net sales fell 3% to $376 million, but rose 52% compared to 2019. Digital sales represented 44% of total second-quarter sales.
By division, sales at Hollister, which includes the Gilly Hicks brand, rose 20% to $514.48 million. Abercrombie’s sales rose 30% to $350.37 million.
In July, the company unveiled a new standalone store concept for its Gilly Hicks brand. The store, at Easton Town Center in Columbus, Ohio, is part of a larger revamp for the intimates and activewear brand towards gender-inclusivity.
In a statement, Abercrombie & Fitch CEO Fran Horowitz said the company’s momentum has continued quarter-to-date.
“We have had a strong start to the U.S. back-to-school season,” Horowitz said. “Reception to the Gilly Hicks brand relaunch, associated product, and updated store experiences has been very positive. At our newest brand, Social Tourist, we are excited about our learnings and results since its launch just three months ago. Looking ahead, we will remain on offense and are confident that the proactive steps we have taken to evolve our operating model and cost structure, combined with evolved brand positioning, should continue to yield near and long-term benefits.”
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