Abercrombie & Fitch Sees 14% Net Sales Growth

By Bobby Samwell • Thursday, November 28 10:17 • Permanent Link

Abercrombie & Fitch Co. has reported its third-quarter fiscal 2024 results, which show significant growth in various key metrics compared to the same period last year. The company achieved record third-quarter net sales of $1.2 billion, marking a notable 14% increase from the previous year. Comparable sales also saw a substantial uptick, rising by 16% compared to the same period in the prior year.

The growth in net sales was broad-based, with notable increases seen across different regions and brands. The Abercrombie brands experienced a 15% growth, while the Hollister brands saw a 14% increase in net sales. This growth translated into an expansion of the operating margin by 170 basis points to 14.8%, with third-quarter operating income increasing by 30% to $179 million compared to the third quarter of the previous year.

The company's financial position and liquidity as of November 2, 2024, revealed a cash and equivalents balance of $683 million and liquidity of approximately $1.1 billion. Additionally, Abercrombie & Fitch Co. had no long-term gross borrowings as all outstanding 8.75% senior secured notes due July 2025 were redeemed with cash on hand in the second quarter of 2024.

In terms of capital allocation, the company repurchased 720,687 shares for approximately $100 million during the third quarter of 2024 and repurchased a total of 924,205 shares for $130 million for the year-to-date period ended November 2, 2024.

Looking ahead, the company has increased its full-year outlook, now expecting net sales growth of 14% to 15% and an operating margin around 15%. The outlook for the fourth quarter includes an anticipated net sales increase in the range of 5% to 7% and an operating margin around 16%.

The strong financial performance has led to the company's CEO, Fran Horowitz, expressing confidence in achieving sustainable, profitable growth, with the goal firmly in their sights for the upcoming holiday season.

As a result of these announcements, the company's shares have moved 1.3% on the market, and are now trading at a price of $148.56. For the full picture, make sure to review Abercrombie & Fitch's 8-K report.

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