Abercrombie & Fitch reported quarterly sales and profit that exceeded Wall Street’s estimates, led by success at the flagship Abercrombie brand. The stock rose the most intraday in two years.
Net sales totalled $880 million (€857m) in the third quarter, exceeding the average analyst estimate of $835.9 million. Sales at the Abercrombie brand rose 10 per cent, while they fell 12 per cent at Hollister, the company’s lower-cost brand.
For the full year, Abercrombie now sees net sales down 2-3 per cent, after previously forecasting a mid-single-digit drop.
The shares jumped as much as 21 per cent to $22.58 in New York trading – the most since November 2020. The stock had fallen 47 per cent this year through Monday, compared with 17 per cent for the S&P 500 Index.
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“We are cautiously optimistic as the holiday season kicks into high gear,” Abercrombie chief executive Fran Horowitz said in a statement. “We have strategically adjusted our inventory receipts for holiday and early 2023, and. unlike last year, we have the inventory on hand to fulfil holiday demand in the peak Black Friday-to-Christmas period.”
The Ohio-based company also said that chairman Terry Burman, who’s held the role since February 2018, will step down effective January 28th. Board member Nigel Travis will take over the position.
American Eagle Outfitters also reported results that exceeded analyst estimates, but the Pittsburgh-based company said it wad cautious about the fourth quarter due to “what is likely to be a highly promotional holiday season”. Its shares rose as much as 15 per cent on Tuesday, the most since June 2020.
The earnings reports from Abercrombie and American Eagle follow better-than-forecast third-quarter earnings from brands including Gap and Urban Outfitters, which both saw stronger sales growth at their higher-end brands. – Bloomberg
