Abercrombie & Fitch (NYSE: ANF) reported Q1 EPS of $0.39, $0.38 better than the analyst estimate of $0.01. Revenue for the quarter came in at $836 million versus the consensus estimate of $814.92 million.

Fiscal 2023 Full Year Outlook

The following outlook replaces all previous full year guidance. For fiscal 2023, the company now expects:

• Net sales growth in the range of 2 to 4% from $3.7 billion in 2022. This is an increase to the previous outlook of up 1 to 3%. The current outlook assumes that Abercrombie will continue to outperform Hollister and the U.S. will continue to outperform International. Also, fiscal 2023 includes a 53rd week for reporting purposes, along with net store expansion. The 53rd week is estimated to add approximately $45 million to total net sales in the fourth quarter and full year of 2023.
• Operating margin to be in a range of 5 to 6%. This range improves from the previous outlook of 4 to 5%. The current outlook includes a benefit of around 250 basis points from full year 2022 levels on expected net improvement in freight and raw material costs, partially offset by modest operating margin deleverage from the combination of inflation and increased operating expense investment for the 2025 Always Forward Plan initiatives, including an upgrade of our retail merchandising ERP system.
• Effective tax rate to be in the high-30s. This replaces the previous outlook of mid-40s. The current outlook assumes the continued inability to realize benefits on certain expected tax losses incurred outside of the U.S., although to a lesser extent than the prior outlook provided.
• Capital expenditures of approximately $160 million.

Fiscal 2023 Second Quarter Outlook

• For the second quarter of fiscal 2023, the company expects:
• Net sales growth to be in the range of 4 to 6% compared to fiscal second quarter 2022 level of $805 million.
• Operating margin to be in the range of 2 to 3% compared to breakeven in Q2 2022 period on expected net improvement in freight and raw material costs, partially offset by modest operating margin deleverage from the combination of inflation and increased operating expense investment for the 2025 Always Forward Plan initiatives, including an upgrade of our retail merchandising ERP system.
• Effective tax rate around 50% with the rate being sensitive to the jurisdictional mix and level of income.

For earnings history and earnings-related data on Abercrombie & Fitch (ANF) click here.