Abercrombie & Fitch has reported a substantial 21% increase in revenue for its fiscal second quarter, building on a 16% sales growth from the same period last year. This robust performance has led the apparel retailer to provide optimistic guidance for the current quarter, though its full-year forecast aligns with expectations due to the impact of having one fewer week in the fiscal year.
CEO Fran Horowitz acknowledged the “increasingly uncertain environment” for the first time in four quarters but expressed confidence in the company’s ability to maintain strong performance. She emphasized the company’s commitment to sustainable, profitable growth while continuing to invest strategically in marketing, digital technology, and store expansions.
Despite the positive earnings report, Abercrombie’s shares experienced a 9% drop in premarket trading. The company reported earnings per share (EPS) of $2.50, exceeding the expected $2.22, and revenue of $1.13 billion, surpassing the anticipated $1.10 billion. Net income for the quarter ending August 3 rose to $133 million from $57 million a year earlier.
Same-store sales increased by 18%, driven by strong summer and back-to-school performance. For the current quarter, Abercrombie forecasts a low double-digit percentage increase in sales, outperforming the 8.9% growth expected by analysts. The company has raised its full-year sales growth forecast to 12-13%, in line with analyst predictions, though the loss of one selling week is expected to impact sales by $80 million in the holiday quarter and $50 million for the full year.
Abercrombie has emerged as a notable success story in retail, with notable sales growth at its Hollister and Abercrombie Kids brands. Sales at Hollister rose 17%, and comparable sales increased by 15%, while the Europe, Middle East, and Africa division saw a 16% boost. The company is also expanding internationally, having recently partnered with Haddad Brands to broaden Abercrombie Kids’ distribution and product offerings.