Abercrombie posts another strong quarter; sees sales moderating
Abercrombie & Fitch Co. maintained its momentum during the holiday quarter, fueled by a strong performance at its Hollister division, but issued cautious guidance.
The apparel retailer expects 2025 sales to rise between 4% and 6%, below the analyst expectation for 5.5% growth, which it partly attributed to the impact of tariffs.
For its first quarter, Abercrombie expects earnings of $1.25 a share to $1.45 a share, well below the estimates, due partly to higher freight costs and inventory levels. On the earnings call, the company cited more carryover inventory due to colder weather in January and February.
Abercrombie's net income rose 11% to $187 million, or $3.57 per share, for the quarter ended Feb. 1, up from $158 million, or $2.97 per share, in the year-ago period. Analysts had expected earnings of $3.54 per share.
Sales rose 9% to $1.58 billion, ahead of estimates of $1.57 billion. (Abercrombie’s sales rose even though there was one extra selling week in the year-ago period.) Comparable sales jumped 14%.
By division, Abercrombie sales increased 2% to $772.67 million. Hollister sales rose 16% to $812.25 billion. Comparable sales at Abercrombie rose 5%. Comp sales surged 24% at Hollister comps.
For the full year, the company’s net sales role 16% to $4.95 billion. Comparable sales increased 17%.
“In fiscal 2024, we once again delivered on our commitments to our global customers and shareholders,” stated CEO Fran Horowitz. “We entered the fiscal year with the goal of achieving sustainable, profitable growth on top of a defining fiscal 2023, and our collective effort and focus produced results well beyond our initial expectations.”
For its current fiscal year, Abercrombie expects earnings to range between $10.40 and $11.40 per share, below Street expectations. The company said its outlook includes an estimated $5 million impact from the tariffs on goods imported from China, Mexico and Canada as it presented in February. It does not include the impact of additional tariffs by the U.S. or by other countries.
“We enter fiscal 2025 with highly relevant brands, an agile playbook, and a motivated global team driven by a culture of innovation and growth,” Horowitz added. “Our expectation in 2025 is to build on the past two years of outstanding results and again deliver profitable growth while strengthening our brands and operating model.”
Abercrombie announced a new $1.3 billion share repurchase authorization. It expects to spend $400 million on stock buybacks in 2025.
As of Feb. 1, the company had a total of 789 stores.
