Abercrombie & Fitch The company reported record first-quarter results on Wednesday, again continuing a strong run that beat expectations.
The company’s sales rose 22% from last year, and profits increased nearly sevenfold, well above Wall Street expectations.
Abercrombie’s shares jumped more than 10% in morning trading.
Based on LSEG’s analyst survey, the apparel company’s first-quarter results compared with Wall Street expectations:
Earnings per share: $2.14 vs. $1.74 expected Revenue: $1.02 billion vs. $963.3 million expected
The company reported net income for the three months ended May 4 of $113.9 million, or $2.14 per share, down from $16.6 million, or 32 cents per share, in the same period last year.
Sales increased approximately 22% to $1.02 billion from $836 million in the same period last year.
“We navigated seasonal changes with the right product assortment and compelling marketing, and leveraged agile tracking and inventory management to achieve sales that exceeded expectations,” CEO Fran Horowitz said in a news release. “Growth was broad-based across geographies and brands, with the Abercrombie brand reporting 31 percent growth and the Hollister brand achieving 12 percent growth.”
Abercrombie is one of the biggest winners in retail, as the company ramps up its business by building on the double-digit sales growth it achieved in 2023 amid a tough year of comparison.
The retailer’s same-store sales rose 21%, following a 3% increase in the same period last year. Abercrombie expects sales to grow again this fiscal year and has raised its earnings outlook.
For the full year, the company now expects sales to grow by about 10%, down sharply from its previous outlook of a 4% to 6% increase. Analysts had been expecting growth of about 7%, LSEG said.
LSEG said it now expects sales to grow in the mid-teens this quarter, beating expectations of a 9% increase.
Horowitz plans to expand on the company’s success by developing the Hollister brand, which accounts for about half of the company’s total sales, and adding more categories to its namesake brand. In March, the retailer debuted “A&F Wedding Shop,” a collection of apparel for brides and guests that can be used not only on the wedding day but also for other wedding parties, such as bachelorette parties and rehearsals.
The pieces in the collection, which includes dresses, bikinis, pajamas and skirts, are priced between $80 and $150. By offering one-day wedding dresses at a mid-price point — something that is typically prohibitively expensive for many couples — Abercrombie can appeal to value-seeking consumers and gain a foothold in the overall bridalwear market, which is projected to reach $83.5 billion in the U.S. by 2030.
Over the past six years, Abercrombie has been working to transform itself from an exclusive retailer that used flashy brands and shirtless models to drive sales into a company focused on inclusivity and catering to working millennials.
The company’s transformation has been years in the making but is starting to pay off as the U.S. apparel market shrinks at the same time the company’s annual sales grow 16% in 2023. The company’s shares are set to soar 285% in 2023 and are up another 73% so far this year as of Tuesday’s close, outpacing the S&P 500’s 11% gain.
Read the full earnings announcement here.
