Abercrombie sees better holiday-quarter sales, posts surprise profit
Reuters
Abercrombie & Fitch
The Ohio-based apparel retailer’s shares that have lost nearly half of their value this year were up about 19 percent after the company also reported third-quarter sales above Wall Street estimates, defying inflation’s impact on non-essential spending.
Chief executive officer Fran Horowitz in a post-earnings call said the company expects the fourth quarter to “mirror more pre-pandemic” holiday.
The company’s attempt to revamp its inventory to get rid of casual and athleisure apparel that have fallen out of fashion and bring in new styles have attracted wealthier shoppers who remain unperturbed by decades-high inflation.
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Abercrombie, however, said there was a little bit of softness in demand during late October and maybe into the first week of November.
Last year, more people were shopping earlier due to inventory shortages, which is probably reflecting the slowdown, said M Science senior analyst Matt Jacob.
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Abercrombie expects fourth-quarter net sales to fall about 2 percent to 4 percent in fiscal 2022, compared with analysts’ average estimate of a 6.3 percent drop, according to Refinitiv IBES data.
Excluding items, it reported a profit of 1 cent per share in the third quarter, compared with estimates of a loss of 16 cents.
