Abercrombie & Fitch has booked strong growth for the fourth quarter, beating the already impressive results of the third quarter.
The company’s net sales surged 21 per cent to $1.5 billion for the 14 weeks ended February 3. The additional week in FY23 benefited fourth-quarter net sales by approximately $50 million.
Comparable sales were up 16 per cent, while operating income was $223 million compared to $87 million last year.
Neil Saunders, MD of GlobalData, said the uplift in revenue, despite being aided by an additional week, shows that the company is “on a roll” as it reaps the rewards of reinvention of and investment in the brand.
At Abercrombie, comparable sales accelerated slightly – at 28 per cent, above last quarter’s 26 per cent growth. Hollister’s comparable sales were up 6 per cent, slightly below last quarter’s 7 per cent.
“The total sales increase of 34.8 per cent at Abercrombie underlines the brand has become a go-to destination among an expanding audience of customers,” commented Saunders.
“Abercrombie has shrugged off – albeit with a lot of effort and hard work – its negative image of the past and has emerged as a modern and sophisticated brand that has relevant and interesting products for shoppers at reasonable prices.”
Hollister, despite experiencing a “choppier” time, managed to achieve some strong results in the back half of the year, with sales up by a solid 9.1 per cent.
For the full year, Abercrombie & Fitch posted net sales of $4.3 billion, up 16 per cent, and an increase of 13 per cent in comparable sales. Operating income was $485 million on a reported basis, compared to $93 million last year.
Overall, Saunders said the growth was the result of a lot of hard work over many years in repositioning the brand, elevating product, improving marketing, and really thinking about what the customer wants.
The company is expecting net sales to be up low double-digits in the first quarter of FY24 and up 4 to 6 per cent for the full year.
“In the near term, first quarter performance is likely to remain strong. Thereafter, the company will start to lap much tougher comparatives so growth rates, while remaining positive, will come down somewhat,” said Saunders.
“This remains a win, as Abercrombie & Fitch will be capturing more market share and continuing to outperform in a challenging market,” he added.
