Abercrombie & Fitch Pops on Q3 Figures

Abercrombie & Fitch (NYSE:ANF) soared as Tuesday’s session began, after reporting an unexpected quarterly profit and beating Street revenue forecasts. The apparel retailer saw resurgent demand for clothing, like jeans and dresses, as consumers returned to work and participated in more social events.

Net sales of $880 million, down 3% as compared to last year on a reported basis and approximately flat on a constant currency basis.

Gross profit rate was 59.2%, down approximately 450 basis points as compared to last year. The year-over-year decrease was primarily driven by 370 basis points of higher freight and raw material costs and 60 basis points from the adverse impact of exchange rates.

Operating income of $18 million and $21 million on a reported and adjusted non-GAAP basis, respectively, as compared to operating income of $73 million and $79 million last year, on a reported and adjusted non-GAAP basis, respectively.

CEO Fran Horowitz, said “We were pleased to see year-over-year sales trends improve across brands in light of the global macroeconomic environment. While net sales were down 3% as compared to last year on a reported basis, net sales were flat on a constant currency basis. Results were driven by Abercrombie brands where we delivered the highest Q3 net sales since 2014 and the tenth consecutive quarter of average unit retail growth.”

Cash and equivalents were $257 million. This compares to cash and equivalents of $823 million and $866 million as of January 29, 2022 and October 30, 2021, respectively.

ANF shares hiked $2.89, or 15.5%, to $21.52.