Abercrombie expects a powerful vacation quarter as progress run continues

Abercrombie & Fitch is not giving up its crown any time quickly. 

The attire firm issued robust vacation steering on Tuesday after posting its sixth straight quarter of double-digit gross sales progress and one other quarter of outcomes that topped expectations. The current arrest of the corporate’s former CEO Mike Jeffries for intercourse trafficking didn’t seem to have an effect on outcomes.

Here is how Abercrombie did in its third fiscal quarter in contrast with what Wall Avenue was anticipating, based mostly on a survey of analysts by LSEG:

• Earnings per share: $2.50 vs. $2.39 anticipated
• Income: $1.21 billion vs. $1.19 billion anticipated

The corporate’s reported web earnings for the three-month interval that ended Nov. 2 was $131.98 million, or $2.50 per share, in contrast with $96.2 million, or $1.83 per share, a yr earlier. 

Gross sales rose to $1.21 billion, up round 14% from $1.06 billion a yr earlier. 

For the all-important vacation buying quarter, Abercrombie is anticipating gross sales progress of 5% to 7%, forward of the 4.8% progress that analysts had anticipated, in keeping with LSEG. For the complete yr, the corporate is anticipating gross sales to rise between 14% and 15%, larger than the 12% to 13% vary it beforehand anticipated. That new outlook is larger than the 12.1% progress analysts had anticipated, in keeping with LSEG. 

Regardless of the higher than anticipated steering, Abercrombie shares dropped about 3% in premarket buying and selling.

In a information launch, CEO Fran Horowitz struck a constructive word, leaving out the issues she’d talked about within the earlier quarter concerning the “more and more unsure atmosphere.” 

“With broad-based progress throughout areas and types, we proceed to execute at a excessive stage, leveraging our regional playbooks and working mannequin. Every of our areas grew double-digits within the quarter, with the Americas rising 14%, EMEA rising 15% and APAC rising 32%,” stated Horowitz.

The Abercrombie and Hollister manufacturers posted comparable gross sales progress of 11% and 21%, respectively. Horowitz famous the robust performances lapped progress of 26% for Abercrombie and seven% for Hollister final yr.

Below Horowitz’s route, Abercrombie has turn out to be one of many retail trade’s greatest winners. Because it laps the robust efficiency it posted final yr, it is persevering with to construct on these numbers.

To maintain gaining momentum, Horowitz is trying to worldwide markets for progress. Abercrombie has additionally gone into new classes, resembling its wedding ceremony assortment and up to date partnership with the NFL. It is also targeted on growing its Hollister chain, which caters to Gen Z consumers, and making certain the model is differentiated from Abercrombie, which caters to millennials. 

In the course of the quarter, gross sales at Hollister had been up 14%, accounting for almost half of all income. 

As retailers gear up for Black Friday and the period of the vacation buying season, it seems as if among the dim sentiment clouding the again half of the yr has evaporated after President-elect Donald Trump’s victory. 

For instance, Abercrombie and Dick’s Sporting Items – which each reported earnings on Tuesday – struck cautious tones when reporting earnings over the summer time, however that sentiment was changed with bullishness now that the election is over. 

Shopper sentiment has improved since Trump’s election and analysts are hopeful that certainty within the election outcomes – no matter who gained – will probably be a boon for spending.