The Brand Continues Positive Streak with Sixth Consecutive Quarter of Double-Digit Gains
Abercrombie & Fitch maintains its growth trajectory with double-digit profits for the sixth consecutive quarter. This consistent progression places the brand ideally for a prosperous holiday season.
The company recently reported quarterly sales growth layered on previous gains and is now en route to achieving its target of surpassing $5 billion in annual sales. The previous year, the brand brought in $4.28 billion in sales.
The company’s operating income for Q3, which ended on November 2, saw an increase of 14.8 percent, rising to $179 million from $138 million in the same period the previous year. Net income also increased to $131.98 million or $2.50 per diluted share, up 10.9 percent from $96.2 million, or $1.83 per share, year-on-year.
Net sales showed significant growth of 14 percent, reaching $1.2 billion from $1.06 billion in the same quarter the previous year, and rose by an equivalent percentage on a constant currency basis. Comparable sales also increased by 16 percent.
CEO Fran Horowitz stated, “For the sixth consecutive quarter, our global team delivered double-digit net sales growth. This great sales performance led to better-than-expected results on both the top and bottom lines.”
Horowitz further added, “With broad-based growth across regions and brands, we continue to execute at a high level, leveraging our regional playbooks and operating model… Our teams are engaged and ready to deliver for our customers this holiday season with the goal of achieving sustainable, profitable growth firmly in our sights.”
Following the company’s Q3 success and the outlook for Q4, A&F has uplifted its full-year sales and operating margin outlook. The company now anticipates 2024 sales to see a growth of 14 to 15 percent as compared to the previous estimate of 12 to 13 percent. Operating margin is also expected to hover around the 15 percent mark.
Fourth-quarter sales are forecasted to rise between 5 percent and 7 percent, with an expected 16 percent operating profit margin.
Breaking down the numbers by brand, Abercrombie’s Q3 sales surged 15 percent to $629.8 million from $54.7 million year-on-year. Hollister reported a 14 percent rise in Q3 sales, reaching $579.1 million from $508.7 million the previous year.
In terms of regional sales, the Americas saw a 14 percent growth to $986.5 million from $867.6 million in Q3 2023. EMEA region sales rose 15 percent to $181.3 million from $157.98 million year-on-year. Sales in APAC soared with a 32 percent increase, amounting to $40.9 million from $30.9 million.