Abercrombie Reports $1.1 Billion in Q1 Sales, 14th Consecutive Growth Quarter
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Newsfilter
- Sales Growth: Abercrombie & Fitch reported first-quarter net sales of $1.1 billion, a 2% increase year-over-year, marking the company's 14th consecutive quarter of growth, driven by a 3% increase in the Americas and a remarkable 24% in the APAC region.
- Brand Performance: Abercrombie brands saw a 3% sales increase, while Hollister brands remained flat; however, demand in the EMEA region softened due to escalating Middle East conflicts, prompting the company to proactively manage inventory and marketing strategies to mitigate impacts.
- Profitability Improvement: The operating income for the first quarter was $89 million, with an operating margin of 8.0%, down from 9.3% last year, yet the earnings per diluted share reached $1.47, exceeding expectations and reflecting the company's ongoing efforts in cost control and operational efficiency.
- Future Outlook: The company maintains its full-year sales growth outlook of 3% to 5% and plans to repurchase approximately $450 million in shares, demonstrating confidence in future growth, while the second-quarter sales growth is projected at 2% to 4%, with earnings per share expected between $1.80 and $2.00.
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Analyst Views on ANF
Wall Street analysts forecast ANF stock price to rise
11 Analyst Rating
6 Buy
5 Hold
0 Sell
Moderate Buy
Current: 82.180
Low
95.00
Averages
123.67
High
160.00
Current: 82.180
Low
95.00
Averages
123.67
High
160.00
About ANF
Abercrombie & Fitch Co. is a global, digitally led omnichannel specialty retailer of apparel and accessories. The Company offers an assortment of apparel, personal care products and accessories for men, women and kids, which are sold primarily through its Company-owned stores and digital channels, as well as through various third-party arrangements. The Company’s brands include Abercrombie brands, which includes Abercrombie & Fitch, abercrombie kids, and Your Personal Best (YPB), and Hollister brands, which include Hollister and Gilly Hicks. Its geographic segments include the Americas, EMEA, and APAC. The Company also offers its loyalty programs, which include Abercrombie’s myAbercrombie and Hollister’s Hollister House Rewards. The Company operates approximately 790 stores under these brands across North America, Europe, Asia and the Middle East, as well as the e-commerce sites abercrombie.com, abercrombiekids.com, and hollisterco.com.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Sales Forecast Adjustments: Gap lowered its annual sales forecast, while American Eagle maintained its full-year comparable sales and operating profit outlook but warned of a contraction in current-quarter gross margin, raising concerns about near-term demand.
- Consumer Sentiment Weakness: U.S. inflation saw its largest increase in three years, and consumer sentiment hit a record low in May, forcing households to tap into savings and reduce discretionary purchases such as clothing and accessories.
- Brand Performance Issues: Gap is undergoing a turnaround under CEO Richard Dickson, but Old Navy's seasonal women's apparel failed to connect with shoppers, leading to sales pressure; American Eagle's Aerie brand saw strong demand, but its main brand struggled due to changing fashion trends.
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- Optimistic Future Outlook: Management anticipates that tariff-related pressures will ease in the coming quarters, projecting full-year net sales growth of 3% to 5% and earnings per share targets of $10.20 to $11.00, reflecting confidence in future performance.
- Shareholder Return Plan: Abercrombie & Fitch plans to return $450 million to shareholders through a substantial stock buyback program, with CEO Fran Horowitz stating that the company is on track for top-line growth, double-digit operating margins, and strong cash flow, further bolstering shareholder confidence.
See More
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- Regional Sales Disparity: While sales in the EMEA division fell 10%, the Americas segment saw a 3% increase, and the Asia-Pacific region surged by 24%, indicating differentiated performance across markets and enhancing the company's global business strategy.
- Shareholder Return Plan: The company plans to return $450 million to investors through a stock buyback program, with CEO Fran Horowitz stating that strong cash flow and double-digit operating margins will support this return strategy, further boosting investor confidence.
- Improved Earnings Outlook: Although earnings per share fell 8% to $1.47, it still exceeded analysts' expectations of $1.28, and management anticipates that tariff-related pressures will ease in the coming quarters, with a full-year net sales growth target of 3% to 5%.
See More
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- Profitability Improvement: The company achieved an earnings per share (EPS) of $1.47, exceeding expectations, with an operating margin of 8%, surpassing planned figures, which demonstrates significant progress in cost control and efficiency enhancement, boosting investor confidence.
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See More
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- Solid Operating Profit: The company reported operating income of $89 million and adjusted EBITDA of $131 million, with a slight decline in operating margin primarily due to increased marketing and ERP implementation costs, indicating effective cost control measures.
- Optimistic Future Outlook: CFO Ball projected full-year earnings per share in the range of $10.20 to $11, with net sales growth expected between 3% and 5%, reflecting confidence in future performance, particularly in developing new channels and partnerships.
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See More
