Abercrombie & Fitch extended its growth streak to 14 consecutive quarters, posting record first-quarter net sales of $1.1 billion.
The retailer reported a 2 per cent increase in net sales for the quarter ended May 2, led by continued momentum in the Americas and Apac. Operating income for the quarter came in at $89 million, down from $102 million a year earlier.
Despite this, the company said both operating margin and earnings per share exceeded its internal expectations.
CEO Fran Horowitz said the results reflected the company’s ability to navigate a “dynamic global environment” while continuing to invest in its brands and customer experience.
“We delivered record first quarter net sales and our 14th consecutive quarter of growth, reflecting our teams’ consistent execution for our customers amid a dynamic global environment,” said Horowitz.
Sales in the Americas rose 3 per cent, while Apaac climbed 24 per cent. This partly offset a 10 per cent decline in EMEA, where Horowitz said demand weakened as conflict in the Middle East escalated.
“We are proactively managing inventory and marketing to support the region,” she added.
By brand, Abercrombie sales rose 3 per cent to $564.7 million, while Hollister sales were broadly flat at $549.1 million.
Looking ahead, Horowitz said the retailer is maintaining its full-year sales and operating margin outlook as it continues investing in product and marketing initiatives.
“With our customer at the center of everything we do and a strong foundation in place, we remain on offense across product and marketing and are confident in our path to deliver,” she concluded.
Commenting on the results, GlobalData MD Neil Saunders said that while the quarter was slower, the company continued to show resilience.
“This was a somewhat slower period for Abercrombie & Fitch and one in which, by previous standards, some of the numbers look quite slim,” he explains.
“However, the good news is that the business still produced a revenue uplift of 1.5 per cent.”
Saunders also commended the company’s efforts to keep its brands’ culturally relevant’, particularly its collaborations with Kappa and Sperry.
“This kind of thing keeps the brand fresh and gives core customers additional reasons to engage and buy,” he continued.
“Inventory has been managed well, margins remain reasonable, and it continues to focus on the productivity of its space by being proactive on store openings, closures, and moves and remodels. This will stand the business in good stead.”
