Abercrombie & Fitch Reports $0.39 EPS in Q1 2023, Shares Surge 31%
Abercrombie & Fitch impresses with unexpected Q1 profit and raises full-year 2023 sales and margin forecasts, driven by lower freight costs and higher pricing.
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Highlights
- Abercrombie & Fitch's stock soared 31% following a surprising profitable first quarter.
- Improved earnings fueled by reduced shipping expenses and increased average unit retail prices.
- Company upgrades 2023 net sales growth forecast to 2%-4% and operating margin to 5%-6%.
On a strong Q1 2023 performance, Abercrombie & Fitch (ANF) reported earnings per share of $0.39, significantly beating analyst expectations of a $0.05 loss. Revenue climbed 2.9% to $836 million, surpassing estimates, while same-store sales increased by 3%, defying predictions of a 1% decline.
The retailer attributes these positive results to a notable drop in freight costs and a substantial rise in average unit retail (AUR) prices, which have increased by double digits since the onset of the COVID-19 pandemic.
CEO Fran Horowitz emphasized that the brand's products strongly resonate with their core customers, leading to record-breaking sales across multiple categories, genders, and regions.
Reflecting confidence in ongoing momentum, Abercrombie & Fitch now projects 2023 net sales growth between 2% and 4%, up from the previous 1%-3% range, alongside an improved operating margin forecast of 5%-6%, compared to the earlier 4%-5% estimate.
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