Abercrombie & Fitch has increased its profit guidance after achieving ‘decade-high’ first-quarter sales.
The American fashion retailer reported a 3% rise in net sales on a reported basis to $836m (£676m) in the first quarter to April 29.
Its Abercrombie brand net sales grew 14% year on year to $436m (£353m) while its Hollister brand shrunk 7% to $399m (£323m).
Net sales grew in the US and Asia-Pacific by 9% and 11% respectively compared with the same period last year. Europe, Middle East and Africa net sales declined by 15%.
The retailer now expects net sales growth to be in the range of 2% to 4% for full-year 2023, up from 1% to 3%. The group also anticipates that its Abercrombie brand will continue to outperform Hollister and the US will perform better than its international arms.
Abercrombie & Fitch chief executive Fran Horowitz said: “Fiscal 2023 is off to a strong start with first-quarter net sales and operating margin above our expectations. Net sales grew 3% to last year, led by Abercrombie brands where we grew 14% achieving the highest first-quarter sales in more than a decade.
“Abercrombie’s offering is resonating meaningfully with our target customer, setting several other sales records this quarter across genders, categories and geographies. Work continues in Hollister brands, where we managed a healthy business from a gross profit rate and inventory perspective, and continued to improve the assortment as we prepare for the summer and back-to-school seasons.
“Looking ahead, we remain cautiously optimistic on consumer demand and our ability to react to a dynamic macro environment, further supported by our strong balance sheet.
“We are managing inventory tightly and each brand is in a position to chase demand. Importantly, we are progressing on key, strategic investments across stores, digital and technology to deliver growth on both the top and bottom lines from 2022 levels consistent with our Always Forward plan.”
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