A&F Sustains Momentum, Reports Q3 Gains – WWD

Abercrombie & Fitch Co., continuing to show momentum and off to a good start to holiday selling, on Tuesday reported healthy top and bottom line gains for the third quarter.

The specialty retailer reported net income of $47.2 million for the period ended Oct. 31, compared to $42.3 million in the year-ago period, or 77 cents a share versus 66 cents a year ago.

On an adjusted basis, income per share was 86 cents compared to 76 cents a share in the year-ago period.

Total sales rose to $905.16 million from $819.65 million in the 2020 period. In the 2019 period, A&F reported $863.72 million in total sales.

“We were very pleased with our third quarter results,” said Fran Horowitz, chief executive officer, in a statement. “Total net sales grew 10 percent year-over-year, or 5 percent from 2019 levels. Our largest market, the U.S., experienced ongoing strength, growing 17 percent on a one-year and 12 percent on a two-year basis.”

Horowitz also said that digital net sales rose 8 percent from last year, representing 46 percent of total third quarter sales.

Fran Horowitz

Fran Horowitz
Courtesy of Fran Horowitz

Gross profit rate declined 30 basis points on a one-year basis and increased 360 basis points on a two-year basis, benefiting from AUR (average unit retail) improvements, offset by elevated supply chain costs.

“Combined with ongoing tight expense controls, we achieved an 8 percent operating margin, representing our best third quarter operating margin and income since 2012,” Horowitz said.

“The start of the holiday season has been promising,” she added. “Customers have come out early to shop and have been responding well to assortments. We continue to actively manage through ongoing supply chain constraints, including production and delivery delays and elevated costs, and are confident that we have the product, marketing voice and omnichannel experience to surprise and delight new and existing customers throughout the fourth quarter.”

By brand, Hollister sales rose to $522.31 million, a 10 percent gain from $476.67 million in the 2020 period, and a 1 percent gain from $514.77 million in the 2019 period. Hollister includes the Hollister, Gilly Hicks and Social Tourist brands.

Abercrombie’s sales rose to $382.85 million last quarter, a 12 percent gain from $342.99 million in sales in the 2020 quarter and a 10 percent gain from $348.7 million in the 2019 quarter. Abercrombie includes the Abercrombie & Fitch and abercrombie kids brands.

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