Abercrombie & Fitch Co. has reported its second quarter fiscal 2024 results, indicating a significant increase in net sales and operating margin. The company achieved a record second quarter net sales of $1.1 billion, representing a 21% increase from the same period last year, with a comparable sales growth of 18%. The operating margin also expanded by 590 basis points to 15.5%, resulting in a record second quarter operating income of $176 million.
The sales growth was observed across regions and brands, with Abercrombie brands achieving a remarkable 26% growth and Hollister brands experiencing an acceleration to 17%. This performance was driven by improvements in global capabilities and the strength of the brand portfolio, leading to broad-based growth across regions, brands, and channels.
The financial results further revealed a gross profit rate increase of approximately 240 basis points compared to last year, and a notable improvement in operating expenses as a percent of sales, which improved to 49.4% from 53.2% last year.
In terms of net sales by segment, the Americas segment led the performance with a 23% growth, followed by EMEA with a 16% increase, and APAC with a 3% growth. Regarding net sales by brand, Abercrombie achieved a 26% growth, while Hollister recorded a 17% increase.
The company also made significant strides in strengthening its financial position and liquidity by redeeming all outstanding 8.75% senior secured notes and amending and extending its ABL facility, resulting in liquidity of $1.2 billion.
Looking ahead, Abercrombie & Fitch Co. has increased its full-year outlook, now expecting net sales growth of 12% to 13% and operating margin in the range of 14% to 15%. The company remains focused on delivering sustainable, profitable growth and making strategic long-term investments across marketing, digital, technology, and stores.
The financial results highlight the company's strong performance and its ability to adapt to changing market dynamics, positioning itself for continued growth and success in the future. The market has reacted to these announcements by moving the company's shares 3.1% to a price of $146.66. Check out the company's full 8-K submission here.
