Abercrombie & Fitch raises outlook on strong Q3

Abercrombie & Fitch third quarter net sales of 1.1 billion dollars, were up 20 percent on a reported basis and up 19 percent on a constant currency basis. Total company comparable sales for the quarter increased 16 percent.

The growth was led by Abercrombie brands with sales increase of 30 percent and Hollister brands, which delivered 11 percent increase.

Commenting on the third quarter trading, Fran Horowitz, the company’s chief executive officer, said in a statement: “Our strong third quarter results, with net sales and operating margin well-exceeding our expectations, speak to the power of our playbook working globally across our brand portfolio. We are increasing our full year outlook for both net sales growth and operating margin.”

The company’s gross profit rate of 64.9 percent, rose approximately 570 basis points as compared to last year, operating income increased to 138 million dollars on a reported basis and net income per diluted share was 1.83 dollars on a reported basis compared to net loss of 4 cents per share and 1 cent on a reported and adjusted non-GAAP basis, respectively.

For fiscal 2023, the company now expects net sales growth of 12 percent to 14 percent, an increase to the previous outlook of growth of around 10 percent. Operating margin is expected to be around 10 percent, an improvement from the previous outlook of in the range of 8 percent to 9 percent.

For the fourth quarter, the company expects net sales growth to be in the low double-digits and operating margin to be in the range of 12 percent to 14 percent compared to an adjusted operating margin of 7.7 percent in the fourth quarter of 2022.