Today, Abercrombie & Fitch Company (NYSE: ANF) witnessed a surprising turn of events following the release of its quarterly financial results. The company’s shares took a mysterious plunge in the morning trading session on Wednesday, despite reporting impressive figures for the fourth quarter.
Abercrombie & Fitch disclosed adjusted earnings per share of $3.57 for the last quarter, surpassing market expectations of $3.52. The company also revealed quarterly sales totaling $1.585 billion, which exceeded the analyst consensus estimate of $1.563 billion. Notably, Abercrombie & Fitch experienced a notable net sales growth of 9%, with a remarkable comparable sales increase of 14%.
Breaking down the sales figures, the Abercrombie brand saw a 2% increase in sales, reaching $772.67 million, while the Hollister brand witnessed a substantial 16% surge year over year, amounting to $812.247 million. In terms of operating performance, the company reported operating income of $256 million for the quarter, compared to $223 million in the previous year. The operating margin as a percentage of sales also rose to 16.2% from 15.3% in the prior year.
Fran Horowitz, the CEO of Abercrombie & Fitch, expressed optimism about the company’s growth prospects, stating, “We entered the fiscal year with the goal of achieving sustainable, profitable growth.” Horowitz highlighted that the company achieved a 16% increase in net sales, reaching nearly $5 billion. Additionally, operating margin expanded to 15%, with notable growth in operating income and earnings per share (EPS) by 53% and 72%, respectively.
As of February 1, Abercrombie & Fitch held cash and equivalents amounting to $773 million, marketable securities worth $116 million, and inventories totaling $575 million, reflecting a significant 22% increase from the previous year. The company also announced a new $1.3 billion stock repurchase program, replacing the prior one authorized in 2021.
Looking ahead, Abercrombie & Fitch provided outlook guidance, anticipating a first-quarter net sales growth of 4% to 6%, and a full-year growth in the range of 3% to 5%. The company expects first-quarter EPS between $1.25 and $1.45, contrasting with the estimated $2.01, and full-year EPS in the range of $10.40 to $11.40, compared to the $10.90 estimate. Operating margins are projected to be 8% to 9% for the first quarter and 14% to 15% for the full year.
Despite the positive financial performance and outlook, Abercrombie & Fitch’s stock experienced a considerable decline of
