Abercrombie & Fitch surpasses expectations with a significant rise in profits, prompting an optimistic revision of its annual outlook.
- The retailer’s operating income surged by 282%, reaching $130m (£102m) in the quarter ending 4 May.
- Net sales increased by 22% year on year, marking a historic high for first-quarter sales at $1bn (£780m).
- Sales growth was notably driven by Abercrombie & Fitch and Abercrombie Kids, with other divisions following suit.
- The company predicts a 10% rise in annual net sales, surpassing its previous estimates.
US retailer Abercrombie & Fitch has announced a substantial increase in profits, with operating income rising by 282% to $130 million for the first quarter ending 4 May. The company’s robust performance has led it to revise and increase its full-year financial outlook, an indication of confidence in continued growth.
In this record-breaking quarter, Abercrombie & Fitch reported a 22% year-on-year increase in net sales, achieving $1 billion. This impressive figure represents the highest first-quarter sales in the company’s history. Such growth was predominantly driven by major gains in Abercrombie & Fitch and Abercrombie Kids, which saw sales jump by 31%. In comparison, divisions such as Hollister and Gilly Hicks posted a 12% increase.
Aligning with its strong start to the fiscal year, the company now anticipates a 10% increase in net sales for the current financial year, up from previous expectations of 4% to 6% growth. CEO Fran Horowitz expressed confidence in the company’s trajectory, noting, “Our outstanding first quarter results reflect the power of our brands and strong execution of our global playbook.”
Operating margins are expected to reach roughly 14%, an improvement over the earlier prediction of 12%. This is a notable enhancement, reflecting Abercrombie & Fitch’s strategic success in both expanding gross profit rates and leveraging its brand strength.
The retailer remains committed to achieving its goal of sustainable, profitable growth in the year 2024, building on what has been described as a defining year in 2023.
Abercrombie & Fitch’s positive results and revised forecast highlight its strong market position and effective strategies.
