Abercrombie & Fitch (ANF) Earnings Q3 2023

Abercrombie & Fitch That beat previous estimates on Tuesday as it reported sales rose 20% on the back of a strong back-to-school shopping season and growth at both its namesake brands and Hollister.

The longtime mall retailer, which has bounced back after years of stagnation, also raised its outlook again as it continues to defy the overall downturn in the apparel industry.

However, the company’s shares fell more than 5% in premarket trading. As of Monday’s close, the stock was up 215% this year.

Here’s how Abercrombie performed in its fiscal third quarter against Wall Street expectations, based on a survey of analysts from LSEG, formerly known as Refinitiv:

• earnings per share: $1.83 vs. $1.18 expected
• Income: $1.06 billion vs. $981 million expected

The company’s net income for the three-month period ended Oct. 28 was $96.2 million, or $1.83 per share, compared with a loss of $2.21 million, or 4 cents per share, a year earlier.

Sales rose to $1.06 billion from $880 million a year earlier.

For its holiday quarter, Abercrombie expects net sales growth to be in the low double digits compared to last year, according to LSEG, which is in line with the 11.6% growth analysts were expecting.

According to StreetAccount, it expects its operating margin to be between 12% and 14%, compared with 7.7% in the year-ago period and above expectations of 11.3%. The expected growth is driven by higher gross profit rates, lower freight costs and higher selling prices.

For the full year, the company expects net sales to grow between 12% and 14%, according to LSEG, up from a previous outlook of about 10% and above analysts’ expectation of 10.8%. According to StreetAccount, it is forecasting an operating margin of about 10%, up from its previous range of 8% to 9%, which is what analysts had expected. The expected growth is driven by lower freight and raw material costs.

During the quarter, Abercrombie’s namesake brand sales rose 30% to $548 million and Hollister’s revenue rose 11% to $509 million. Same-store sales increased 16% across both brands.

“Our strong third quarter results, net sales and operating margins far exceeded our expectations, which speak to the power of our playbook that works globally across our brand portfolio,” CEO Fran Horowitz said in a news release. ” “Entering the important holiday season, our fiscal 2023 year-to-date results give us confidence that we can continue to deliver for our customers and drive profitable growth. Thus, we are expected to achieve net “We are raising our full-year outlook for both sales growth and operating range.”

Abercrombie’s stock has soared this year as the company’s transformation continues to bear fruit. For years, Abercrombie was known for its branded T-shirts and jeans and shirtless male models, which in turn led critics to accuse the company of racism and exclusivity.

Since Horowitz took over as CEO of the brand, Abercrombie has transformed itself into an inclusive retailer with a product assortment that continues to resonate with consumers.

Read the full earnings release Here,