Abercrombie & Fitch has raised its outlook for the full financial year as it recorded a surge in sales during the second quarter, which it credits to the success of the “positioning and assortment” of its brand portfolio.
The US and fashion and lifestyle retailer posted a 16% increase in net sales year on year to $935m (£739.9m) for the three months to July 29, 2023.
Sales for the Abercrombie brand were up 26% year on year to $462.7m (£366.2m), while sales at Hollister were up 8% at $472.6m (£374m).
Sales in Europe, the Middle East and Africa increased 4%, while sales in the Americas and the Asia-Pacific region jumped by 19% and 18% respectively.
The retailer reported operating income of $90m (£71m) for the second quarter, compared with a loss of $2m (£1.6m) during the same period last year.
In terms of outlook, Abercrombie & Fitch said it anticipates net sales growth of 10% for the full financial year, up from its previous outlook of between 2% and 4% growth, assuming that “Abercrombie brands will continue to outperform Hollister brands”.
The retailer also expects operating margin for the year to be between 8% and 9% instead of its previously forecasted 5% to 6% range.
Abercrombie & Fitch chief executive Fran Horowitz said: “Our net sales and operating margin exceeded our expectations as global growth accelerated throughout the second quarter. We continue to see strong customer receptivity of our brands and product, led by 26% net sales growth in Abercrombie brands.
“These strong results showcase the power of our playbook and our team’s ability to align product, voice and experience to meet our customers’ needs.
“Operationally, we are strategically managing inventory, leveraging capabilities to support demand and driving efficiency across our business.
“While the macro environment remains dynamic, our first-half results give us confidence to stay on offence for the second half.
“Consistent with our Always Forward Plan, we are continuing to open stores and make critical long-term investments in digital and technology that will keep our brands in position to exceed our customers’ expectations.”
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