Abercrombie & Fitch soars after upbeat holiday sales forecast
By Melissa Fares and Uday Sampath Kumar - Dec 3rd, 13:52
US teen apparel retailer Abercrombie & Fitch forecast same-store sales for the holiday quarter above analysts’ estimates, driven by strong sales at its Hollister and flagship stores, sending its shares rising 24% in early trading.
“We saw a solid start to the holiday season in November, with strong double-digit growth on Singles Day on Tmall, and a record performance over the peak holiday period from Thanksgiving Day through Cyber Monday,” CEO Fran Horowitz said on a call with investors.
Tmall is Alibaba’s giant online marketplace.
Horowitz emphasised the steep investments the company has made in better managing its supply chain and product assortment to serve customers faster.
Abercrombie has changed its namesake fashion brand in recent years, doing away with risque advertising and logo-emblazoned apparel, which fell out of fashion in the late 2000s. It has relied on Hollister to generate the majority of its revenue as its denim and Gilly Hicks intimates collections prove to be a hit with younger customers.
The New Albany, Ohio-based retailer now expects to close fewer stores in the current year based on improved performance and successful lease renegotiations. It expects closing up to 40 stores by the end of the year, primarily in the US, down from its previous target of closing up to 60 stores.
Ken Perkins, founder of research firm Retail Metrics, said the company was well-positioned for a strong holiday but Abercrombie’s namesake brand has some work to do to resonate with shoppers.
The company promoted the head of Hollister, Kristin Scott, to the newly created position of Global Brands president. Stacia Andersen, brand president of Abercrombie & Fitch, would be leaving the company, it said.
The apparel retailer said it expected fourth-quarter same-store sales to rise in the low single digits. Analysts had expected an increase of 0.6%.
Sales at established stores rose 3% in the third quarter ended November 3, well above an increase of 1.6% estimated by analysts, according to IBES data from Refinitiv.
Net income rose to $23.9m, or 35c per share, from $10.1m, or 15c per share, a year earlier.
Excluding one-time items, the company earned 33c per share, while net sales rose 0.2% to $861.2m.
Analysts, on average, expected adjusted earnings of 20c per share on revenue of $853m.Business Live
FoST - An immersive storytelling experience, but is South Africa ready for the learnings?
07/12/2018 - 10:05
In an industry that changes as quickly as the weather in Joburg, marketers have seen a vast change in the depiction of brands and a fascinating shift in the consumer experience.
Aldi opens a record number of stores in one day
07/12/2018 - 09:45
Aldi UK has opened a record eight stores on a single day as part of a tranche of 24 new outlets that are opening throughout November and December.
SA grocery retailers hoping for a merry festive season
06/12/2018 - 08:18
Grocery retailers have had a tough year, and like other retailers are hoping to see a boost in sales over the festive season.
New age consumerism and the consumer power-shift
05/12/2018 - 10:37
Advances in telecommunication technology have transformed the tools used for marketing and consumerism and ultimately, the way that businesses operate. The Statista 2017 Report indicated that the number of smartphone users in the United States is estimated to have reached 224.3 million, with smartphone users worldwide exceeding 2 billion. Undoubtedly, we are running headlong into the end of the industrial era of consumption and into a consumer power-shift.
UK Grocers 'under pressure' as Christmas approaches
04/12/2018 - 10:25
Weaker-than-expected growth in the month of October is putting retailers under pressure as Christmas approaches, according to Nielsen.