Abercrombie & Fitch Stock Falls Despite 20% Sales Increase
On Tuesday, Abercrombie & Fitch exceeded estimates with a 20% spike in sales, driven by a strong back-to-school shopping season and growth at both its namesake brand and Hollister. However, despite the strong performance, the company’s stock fell more than 5% in premarket trading.
The company’s fiscal third-quarter results surpassed Wall Street expectations, with earnings per share at $1.83 compared to $1.18 expected and revenue at $1.06 billion versus $981 million anticipated. This marked a significant turnaround from the previous year, when the company reported a loss in the same period.
Looking ahead, Abercrombie expects continued growth in its holiday quarter, with net sales anticipated to increase by low double-digits compared to the prior year. The company also raised its forecast for the full year, now expecting net sales to grow between 12% to 14%, up from its previous outlook of around 10%. This strong outlook has boosted confidence in Abercrombie’s prospects for continued profitable growth.
The company’s CEO, Fran Horowitz, attributed the strong results to the successful execution of their global playbook across their brand portfolio. The company’s transformation from a brand associated with exclusivity and criticism to an inclusive and consumer-resonating retailer has been credited with driving this growth.
Abercrombie’s stock has soared this year as the company continues its transformation. Over the years, the retailer has evolved its image from its previous association with branded t-shirts and controversies around exclusivity to a more inclusive retailer with a product assortment resonating with consumers.
For those interested, the full earnings release is available to read on their website.
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