Abercrombie & Fitch, transcending soft consumer trends globally, extended its streak of strong quarterly gains and reported a whopping 21 percent second-quarter sales uptick.
The company also reported Wednesday that it raised its forecast for 2024, for the second time this year.
Net sales in the quarter ended Aug. 3 increased to $1.1 billion, from $935.3 billion in the year-ago period, and comparable sales rose 18 percent.
Net income last quarter rose to about $250.5 million, or $2.50 per diluted share, from $76.6 million, or $1.10, from the year-ago period. Operating income rose to $176 million as compared to operating income last year of $90 million.
The results marked the seventh straight quarter of gains for the operator of the Abercrombie, Abercrombie kids, Hollister and Gilly Hicks brands.
Now the company is eyeing net sales growth in the range of 12 to 13 percent for 2024, versus the previous outlook of around 10 percent. A&F had initially raised in its outlook at the end of the first quarter this year.
The company cited “broad-based net sales growth across regions and brands, with Abercrombie brands growth of 26 percent and Hollister brands accelerating to growth of 17 percent.”
“Our team continued to execute at a very high level in the second quarter, resulting in better-than-expected sales growth and profitability,” Fran Horowitz, chief executive officer, said in a statement Wednesday. “The strength of our brand portfolio and improvements we’ve made in global capabilities resulted in broad-based growth across regions, brands and channels. The Americas led our performance this quarter with net sales growth of 23 percent on top of 19 percent growth last year, along with continued strong results in EMEA with growth of 16 percent.
“Abercrombie brands achieved growth of 26 percent on top of 26 percent growth last year, and Hollister continued its sequential acceleration to growth of 17 percent with better-than-expected summer and back-to-school selling,” Horowitz added. “Consistent with the first quarter, we delivered improved profitability driven by gross profit rate expansion and operating leverage, with a second quarter operating margin of 15.5 percent and record second quarter operating income of $176 million.
“We delivered a strong first half of the year, and we are increasing our full-year outlook. Although we continue to operate in an increasingly uncertain environment, we remain steadfast in executing our global playbook and maintaining discipline over inventory and expenses. We are on track and confident in our goal to deliver sustainable, profitable growth this year, while making strategic long-term investments across marketing, digital and technology and stores to enable future growth.”
In recent quarters, A&F has benefitted by being more inclusive in its advertising and imagery, gaining popularity through influencer and affiliate programs, updating its store design, which is smaller and more open, differentiating its Abercrombie and Hollister brands to appeal to different age segments, and listening more to consumer preferences.
From Hollister for fall.
Courtesy image
