Abercrombie & Fitch Co. (ANF) Increases Fourth Quarter Sales and Operating Margin Outlook Based on Better-Than-Expected Holiday Sales
Abercrombie & Fitch Co. (NYSE: ANF) today provided a business update and updated its outlook for the fourth quarter and full year of fiscal 2022.
Fran Horowitz, Chief Executive Officer, said: “I am pleased with our quarter-to-date performance. Our brands performed well during the peak holiday selling period, delivering sequential sales trend improvement from third quarter levels, leading us to increase our fourth quarter sales and operating margin outlook.
At Abercrombie, the strong momentum we have seen all year at the Abercrombie & Fitch brand continued in the holiday season with the women's business on track to deliver its highest fourth quarter sales ever. Importantly, this strong performance has been complemented by an acceleration in men's growth from third quarter trends. For Hollister, while we expect to finish the fourth quarter with sales below 2021 levels, the sales trend improved nicely from third quarter as we have begun to realize initial benefits from assortment adjustments and personnel changes.
Moving into 2023, we continue to balance playing both offense and defense in this evolving macroeconomic environment. We are managing operating expenses tightly, and we continue to target an inventory level consistent with 2021 by year end, positioning our brands to chase receipts in the spring season. At the same time, we are leveraging the company's strong financial position to drive key, long-term investments in our operations, specifically in technology, stores and supply chain. We believe these investments will best position us to achieve our 2025 Always Forward Plan."
| Fourth Quarter of Fiscal 2022 Outlook: | ||
| Current Fourth Quarter Outlook | Previous Fourth Quarter Outlook(1) | |
| Net Sales | Up in the range of 1% to 2%(2) | Down in the range of 2% to 4%(2) |
| Operating Margin | In the range of 6% to 8% | In the range of 5% to 7% |
| Effective Tax Rate | Mid-to-high 40s | Mid-to-high 40s |
| Full Year Fiscal 2022 Outlook: | ||
| Current Full Year Outlook | Previous Full Year Outlook(1) | |
| Net Sales | Down around 1%(3) | Down in the range of 2% to 3%(3) |
| Operating Margin | In the range of 2.5% to 3% | In the range of 2% to 3% |
(1) Released November 22, 2022(2) The current fourth quarter outlook reflects an adverse impact of approximately 210 basis points from foreign currency, down from approximately 300 basis points in the previous outlook.(3) The current full year outlook reflects an adverse impact of approximately 220 basis points from foreign currency, down from approximately 250 basis points in the previous outlook.
The company will be participating in meetings with investors and analysts at the ICR XChange Conference to be held on January 9-10, 2023.