Abercrombie & Fitch ups guidance after ‘outstanding’ first quarter

The US fashion and lifestyle retailer posted a 22% increase in net sales to reach $1bn (£790m) for the first quarter to May 4, 2024, marking the highest first quarterly sales in the retailer’s history.

Sales for the Abercrombie & Fitch and Hollister brands were up 31% and 12% year on year respectively.

Operating income for the period reached $130m (£102.2m), up from $34m (£26.7m) on a reported basis in the previous year.

Sales in the Americas soared 23% during the quarter, while sales in Europe, the Middle East and Africa increased by 19%. Sales were also up 10% in the Asia-Pacific region.

In terms of outlook, Abercrombie has increased its guidance and now expects net sales growth of around 10% from $4.3bn (£3.4bn) last year. This is up from the previous guidance of between 4% and 6%.

The retailer added that it expects the Abercrombie brands to continue outperforming Hollister, while the Americas is also anticipated to “lead the regional performance”.

Operating margin for the full year is also expected to be around 14%, up from the previously pledged guidance of around 12%.

Abercrombie & Fitch chief executive Fran Horowitz said: “Our outstanding first-quarter results reflect the power of our brands and strong execution of our global playbook.

“We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations.

“Growth was broad-based across regions and brands with Abercrombie brands registering 31% growth and Hollister brands delivering growth of 12%.

“Strong top-line growth, along with gross profit rate expansion, led to record first-quarter operating income and an operating margin of 12.7%.

“With excellent first-quarter performance, we are increasing our full-year sales and operating margin outlook. We remain on track to achieve our 2024 goal of demonstrating sustainable, profitable growth after a defining year for the company in fiscal 2023.

“Our brands are delivering high-quality, on-trend assortments for new and retained customers across regions and brands.

“Importantly, we continue to make strategic investments across stores, digital and technology to further strengthen the company in pursuit of our long-term ambition.”