Abercrombie & Fitch reached record net sales last quarter and has raised its full-year outlook, amid strong growth in its Hollister brand.
Net sales were US$1.21 billion, up 7% year-over-year and above LSEG estimates of $1.20 billion. Adjusted earnings per share were $2.32, down from $2.50 one year ago but beating estimates of $2.30.
“We delivered record second quarter net sales, exceeding our expectations, with 7% growth to last year. We continued to drive meaningful engagement with our teen customer in Hollister brands, growing 19% on strong summer and back-to-school demand,” said Abercrombie & Fitch CEO Fran Horowitz.
Hollister sales surged by 19% to US$656.69 million, overtaking its Abercrombie brands.
Meanwhile, Abercrombie’s net sales declined to $551.87 million. “While we made progress on key inventory initiatives by leveraging promotions and testing new product concepts, Abercrombie brands net sales were down 5%, lapping 26% growth in the prior year,” said Horowitz.
Its sales in the Americas were up 8% year-over-year to reach US$974.20 million, while Asia Pacific sales rose by 12% to $37.15 million. Europe, Middle East, and Africa sales dropped by 1% to $197.21 million.
Operating income was US$206.66 million, up from $175.63 million one year ago.
The company’s full-year outlook now projects net sales growth of 5-7%, including US$90 million in tariff costs, compared with its previous forecast of 3-6%. Expected earnings per share are US$10.00-10.50, raised from $9.50-10.50.
For its third quarter, Abercrombie & Fitch’s guidance includes net sales growth of 5-7% and earnings per share of $2.05-2.25.
Abercrombie & Fitch’s (NYSE: ANF) share price closed at US$95.36, down from its previous close at $96.70. Its market capitalisation is $4.54 billion.
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