Abercrombie & Fitch ($ANF) delivered fiscal second-quarter results that exceeded expectations, reporting a notable revenue increase. For the three-month period ending August 3, the apparel retailer generated revenue of $1.13 billion, up from $935.3 million during the same timeframe last year. This result not only surpassed the average analyst estimate of $1.09 billion, as indicated by Capital IQ, but also showcased the brand’s robust growth strategy in a competitive retail landscape.
Adjusted earnings per share climbed to $2.50, significantly improving from $1.08 a year ago, exceeding the $2.22 projections from analysts. Fran Horowitz, the Chief Executive Officer of Abercrombie & Fitch, acknowledged the challenges ahead while emphasizing the company’s commitment to executing its global playbook effectively.
Despite a favorable sales performance, the shares of Abercrombie & Fitch experienced a significant drop, tumbling 17% during trade on Wednesday. The company's comparable store sales exhibited an impressive 18% growth for the quarter. This increase was primarily driven by a 21% surge in Abercrombie stores and a 15% rise at Hollister.
Better-than-expected sales during the summer season and the back-to-school period contributed significantly to this success, with double-digit growth reflected in all geographic regions of Abercrombie & Fitch. “The strength of our brand portfolio and the enhancements we've made in our global capabilities led to broad-based growth across various regions, brands, and channels,” stated Horowitz.
She added that, following a strong first half of the year, the company is optimistic about the prospects for the remainder of the fiscal year. In a display of confidence, Abercrombie & Fitch has raised its full-year sales growth forecast to between 12% and 13%. This revision follows a previous estimate in May that projected approximately 10% growth, an optimistic shift from an earlier guidance of 4% to 6%.
As per the consensus from Capital IQ, the anticipated revenue for the current fiscal year is pegged at $4.77 billion. Looking ahead to the third quarter, Abercrombie & Fitch anticipates low double-digit sales growth from the $1.06 billion reported for the same quarter last year. Analysts predict that the retailer will achieve revenue of $1.15 billion for this period, reflecting an ongoing positive momentum despite the broader market uncertainties. Price: 140.83, Change: -25.79, Percent Change: -15.48 $ANF.