Abercrombie & Fitch Reports Strong Earnings in Q2 and Increases 2024 Outlook

Clothing retailer Abercrombie & Fitch posted net income of $133 million, about $2.50 a share, in the second quarter. The results were substantially better than the $57 million, or $1.10 per share, for the same quarter last year. Sales were up 21%, reaching $1.13 billion.

Overall same-store sales gained 18% in fiscal Q2. Abercrombie-owned Hollister saw a 17% jump in sales, with comparable sales rising 15%.

With the positive numbers came an improved full-year outlook for Abercrombie. The company expects a 12% to 13% growth for 2024 versus a previous prediction of 10%.

“We are on track and confident in our goal to deliver sustainable, profitable growth this year, while making strategic long-term investments across marketing, digital and technology and stores to enable future growth,” said CEO Fran Horowitz, per CNBC.

Even though Abercrombie increased its guidance for the year, Horowitz noted an “increasingly uncertain environment,” which means the company will need to keep a grip on expenses and inventory. After the comment, investors got nervous in early trading and shares of the company fell 15%.

Abercrombie’s fiscal year will be one week shorter than 2023. The loss of this holiday selling week will likely cost the company $80 million.

After taking the CEO position at Abercrombie in 2017, Horowitz made plans to revamp the company’s image and begin targeting younger millennials. The plan included closures of larger stores in favor of smaller stores with brighter lighting, wood paneling, and even sophisticated chandeliers.

Meanwhile, the clothing giant is furthering its reach through Abercrombie Kids. Children’s wear licensor Haddad Brands has partnered with Abercrombie to develop new distribution channels as well as expand infant and toddler clothing lines.

Also new for Abercrombie is its apparel line for weddings. Under the “A&F Wedding Shop” banner, stores will offer clothes for brides and guests for the actual event as well as outfits for wedding activities like rehearsal dinners and bachelorette parties.