The operating income of the company reached $102 million, though the margin narrowed to 9.3 per cent from 12.7 per cent in the same period a year earlier. Earnings per diluted share stood at $1.59, down from $2.14 in Q1 FY24.
Abercrombie & Fitch Co has reported net sales of $1.1 billion in Q1 FY25, up 8 per cent YoY, led by 22 per cent growth in Hollister brand.
The operating margin declined to 9.3 per cent, with EPS at $1.59.
EMEA sales rose 12 per cent.
FY25 outlook sees lowered EPS and margin guidance, steady capex of $200 million, and Q2 sales growth forecast at 3–5 per cent.
The company saw broad-based regional growth, with Europe, the Middle East, and Africa (EMEA) sales rising 12 per cent, Americas up 7 per cent, and Asia-Pacific (APAC) improving 5 per cent, Abercrombie said in a press release.
Brand-wise, Hollister led the performance with a 22 per cent YoY increase in net sales, while Abercrombie brands declined 4 per cent, following a strong 31 per cent surge in the same quarter last fiscal.
“We delivered record first quarter net sales with 8 per cent growth to last year. This was above our expectations and was supported by broad-based growth across our three regions. Hollister brands led the performance with growth of 22 per cent, achieving its best ever first quarter net sales, while Abercrombie brands net sales were down 4 per cent against 31 per cent sales growth in 2024,” said Fran Horowitz, chief executive officer (CEO) at Abercrombie & Fitch Co.
“We exceeded our expectations on the bottom line as well, with operating margin of 9.3 per cent and earnings per share of $1.59. We also returned excess cash to shareholders through share repurchases totalling $200 million in the quarter, marking our fifth consecutive quarter of share repurchases,” added Horowitz. “As we navigate the current environment, we have the team and proven capabilities in place to read, react and adapt, while continuing to deliver for customers globally. Importantly, with a strong foundation, we remain on offense and focused on top-line growth, store expansion, and investments in digital and technology that will enable sustainable long-term success.”
Abercrombie has revised its fiscal 2025 outlook and now it anticipates net sales growth in the range of 3 to 6 per cent, slightly higher than its previous 3 to 5 per cent forecast. However, it has cut its projected operating margin to 12.5–13.5 per cent from 14–15 per cent and lowered its net income per diluted share estimate to between $9.5 and $10.5, down from $10.4 to $11.4.
Capital expenditures (capex) are expected to remain at approximately $200 million, in line with its previous guidance. It also plans for 60 store openings, 20 closures, and 40 remodels or right-sizings, added the release.
For the second quarter (Q2) FY25, Abercrombie projects net sales growth of 3 to 5 per cent, an operating margin of 12 to 13 per cent, and earnings per diluted share of $2.1 to $2.3.
Fibre2Fashion News Desk (SG)
