Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Abercrombie & Fitch "cautiously optimistic" on 2023 customer demand

Published 01/03/2023, 14:26
Updated 01/03/2023, 14:26
© Reuters.

© Reuters.

By Scott Kanowsky 

Investing.com -- Abercrombie & Fitch Company (NYSE:ANF) has said it remains "cautiously optimistic" about consumer demand in 2023 after the fashion retailer posted better-than-expected sales in the fourth quarter.

The company expects operating margin to be in the range of 4% to 5% this year, bolstered in particular by strong U.S. performance. Freight and raw material costs are seen easing compared to 2022, although this trend will be partially offset by higher expenses stemming from investments in its 2025 growth plans.

Meanwhile, in the first quarter, net sales at the Ohio-based owner of casual wear chains like Abercrombie Kids and Hollister are projected to be flat at $813 million, with an operating margin somewhere between breakeven to 2%.

"We are pleased with our inventory levels and each of our brands is in a position to chase," said chief executive officer Fran Horowitz in a statement.

"While we expect to see net product cost benefits in 2023, we will continue to tightly manage our expenses, inventory and cash flow to properly balance investing for the long-term while improving profitability."

The outlook comes after sales in the fourth quarter grew by 3.3% year-on-year to $1.20 billion, slightly ahead of Bloomberg consensus estimates of $1.18B, as demand for its eponymous Abercrombie brand helped overcome weakness at Hollister. Horowitz noted that the group faced "significant" challenges from surging inflation, which has threatened to lead shoppers to rein in spending on retail items.

Adjusted earnings per share fell to $0.81 from $1.14 in the final three months of the prior year, below analysts' target of $0.86 per share.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.