Abercrombie Fitch Co Reports Stellar Q2 2024 Financial Results
Intellectia.AI2024-08-28
Abercrombie & Fitch Co. Reports Stellar Q2 2024 Financial Results
Abercrombie & Fitch Co. (NYSE: ANF) has announced its financial results for the second quarter ended August 3, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | YoY Change | Consensus Estimates | Beat/ Miss |
|---|---|---|---|---|---|
| Total Revenue | $1.1 billion | $908 million | +21% | $1.1 billion | Meet |
| Earnings Per Share (EPS) | $2.50 | $1.10 | +127.3% | $2.22 | Beat |
| Operating Income | $176 million | $90 million | +95.6% | ||
| Operating Margin | 15.5% | 9.6% | +590 bps | ||
| Gross Profit Rate | 64.9% | 62.5% | +240 bps |
In the second quarter, Abercrombie & Fitch reported a remarkable financial performance with both top-line and bottom-line growth. The total revenue matched Wall Street's consensus estimates, while earnings per share significantly exceeded expectations, showcasing a robust performance.
Revenue Breakdown by Segment
| Segment | Q2 2024 Revenue | YoY Change | Q2 2023 Revenue |
|---|---|---|---|
| Abercrombie Brands | +26% | ||
| Hollister Brands | +17% | ||
| Americas | +23% | ||
| EMEA | +16% |
The company's revenue growth was primarily driven by solid performance across all segments, with Abercrombie brands leading the charge at +26% year-over-year. The Americas region showed the highest regional growth with a 23% increase, followed by 16% growth in the EMEA region.
Key Developments and Operational Highlights
- Improved Operating Margin: Operating margin expanded to 15.5%, a 590 basis point improvement from the previous year.
- Record Operating Income: Achieved a record second-quarter operating income of $176 million.
- Strengthened Balance Sheet: Redeemed all of its outstanding 8.75% senior secured notes and amended and extended ABL Facility leading to liquidity of $1.2 billion.
- Increased Full-Year Outlook: Raised full-year net sales growth outlook to 12% to 13%, and operating margin outlook to 14% to 15%.
Comments from the CEO
Fran Horowitz, Chief Executive Officer of Abercrombie & Fitch Co., commented: "Our team continued to execute at a very high level in the second quarter, resulting in better than expected sales growth and profitability. The strength of our brand portfolio and the improvements in our global capabilities led to broad-based growth across regions, brands, and channels. We remain steadfast in executing our global playbook and are confident in our goal to deliver sustainable, profitable growth while making strategic long-term investments across marketing, digital and technology, and stores to enable future growth."
Dividends and Share Repurchase Program
- During the second quarter of 2024, the company repurchased 84,054 shares for approximately $15 million.
- Year-to-date, the company has repurchased 203,518 shares for $30 million.
- The company has $202 million remaining on the share repurchase authorization established in November 2021.
Forward Guidance
Abercrombie & Fitch has provided an optimistic outlook for the upcoming periods: - Full-Year 2024: Net sales growth of 12% to 13%, and an operating margin of 14% to 15%. - Third Quarter 2024: Net sales growth in low double-digits, with an operating margin in the range of 13% to 14%.
Stock Price Movement
Following the earnings release, Abercrombie & Fitch Co. experienced a stock price movement of -1.65%.
In summary, Abercrombie & Fitch Co. delivered a strong set of financial results for Q2 2024, marked by significant revenue and EPS growth. The company’s robust performance across regions and brands, coupled with strategic financial maneuvers, has fortified its position for sustained profitability and growth.
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