Abercrombie & Fitch CEO on getting into the wedding business after strings of earnings beats

Abercrombie & Fitch CEO on getting into the wedding business after strings of earnings beats

After another blowout quarter, Abercrombie & Fitch (ANF) CEO Fran Horowitz is aiming to add a few legs to the resurgent retailer’s growth story.

Horowitz tells Yahoo Finance the company has just launched men’s suits to capitalize on the recent successful launch of a women’s wedding attire business.

The company will also make a big US store-opening push into year-end and ramp up its growth initiatives in key markets such as Germany and the UK.

Abercrombie & Fitch’s first quarter results and refreshed outlook give Horowitz air cover to test new businesses and regain a stronger international presence.

Abercrombie & Fitch CEO on getting into the wedding business after strings of earnings beats

Shoppers are seen at Abercrombie & Fitch store during “Black Friday” in New York on Nov. 24, 2023. (YUKI IWAMURA/AFP via Getty Images) (YUKI IWAMURA via Getty Images)

First quarter same-store sales at both Abercrombie & Fitch and Hollister rose by double-digit percentages as young adults scooped up its looserfitting tops and bottoms. Profit margins also expanded significantly, with the company showing a knack for controlling inventory and selling at full price in a promotional retail climate.

“The overall product is working,” Horowitz says.

Citi retail analyst Paul Lejuez dubbed the quarter “exceptional.”

Shares of Abercrombie & Fitch surged 22% on today’s session. The stock is up a sizzling 851% the past two years, according to Yahoo Finance data.

  • Net sales: +22% year over year to $1 billion, vs. estimates for $958.7 million

  • Same-store sales: +21% vs. +15.7% estimate

  • Gross profit margin: 66.4% compared to 61% a year ago, vs. estimates for 64.4%

  • Adjusted diluted EPS: +449% year over year to $2.14, vs. $1.69 estimate

  • The company ended the quarter with $864 million in cash, up 93.2% year over year.

  • Inventories only rose slightly year on year.

  • Second quarter outlook:

    • Net sales: Up by a mid-teens percentage year over year

    • Operating margin: 13% to 14%, compared to 9.6% a year ago

  • Full-year outlook:

    • Net sales: +10% (previous: up by 4% to 6%)

    • Operating margin: 14% (previous: around 12%, compared to 11.4% a year ago)

Consumers aren’t only loading up on Abercrombie & Fitch gear for the summer. They also appear to be more open to buying speakers from Sonos compared to 2023, CEO Patrick Spence said on a new episode of the “Opening Bid” podcast. Listen in below.

Brian Sozzi is Yahoo Finance’s Executive Editor. He is also the host of the “Opening Bid” podcast. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com. Are you a CEO and want to come on Yahoo Finance Live? Email Brian Sozzi.

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