Abercrombie & Fitch’s fourth quarter net sales increase 4%

For the fourth quarter ended January 29, 2022, Abercrombie & Fitch Co. reported net sales of $1.2 billion, up 4% from a year ago and down 2% from the fourth quarter 2019 pre-Covid.

Commenting on the results, Fran Horowitz, CEO of the company, said: “2021 is a testament to the fundamental changes we have made to strengthen our fundamentals and improve our profitability. We are pleased with our recent performance. Following delays in receiving inventory that impacted the peak holiday sales period, sales trends initially improved as products began to arrive. While mid-January was impacted by the ramp-up of Omicron, sales rebounded at the end of January with the drop in boxes and the introduction of new assortments. The momentum has continued since the start of the quarter.

Abercrombie & Fitch Fourth Quarter Performance Highlights

The company’s digital net sales were $556 million or 48% of total net sales, compared to $475 million or 40% in the fourth quarter of 2019.

The gross margin rate was 58.3%, down about 220 basis points from last year and up 10 basis points from 2019.

Operating income was $98 million and $100 million on a reported and adjusted non-GAAP basis, respectively, compared to $116 million and $131 million last year on a non-GAAP basis published and adjusted, respectively.

Net earnings per diluted share were $1.12 and $1.14 on a reported and adjusted non-GAAP basis, respectively, versus $1.27 and $1.50 on a reported and adjusted non-GAAP basis, respectively .

Abercrombie & Fitch Annual Results Summary

Net sales were $3.7 billion, up 19% from a year ago and 2% from net sales in the year 2019 before Covid. Digital net sales were $1.7 billion or 47% of total net sales, compared to $1.2 billion or 33% in fiscal 2019.

Gross margin rate was 62.3%, up approximately 180 basis points from last year and 290 basis points from 2019. Operating income was $343 million and $355 million on a non-GAAP basis, respectively. That compares to an operating loss of $20 million and profit of $52 million on a reported and adjusted non-GAAP basis, respectively.

Net earnings per diluted share were $4.20 and $4.35 on a reported and adjusted non-GAAP basis, respectively, compared to a net loss per diluted share last year of $1.82 and 73 cents on a reported and adjusted non-GAAP basis, respectively.

Abercrombie & Fitch expects FY22 net sales to grow 2-4%

For fiscal 2022, the company expects net sales to grow 2-4% from $3.7 billion in 2021 as the US continues to outperform EMEA and APAC, driven by the growth of comparable sales and the number of stores.

The company expects the gross margin rate to decline by approximately 200 basis points from the 62.3% rate for fiscal 2021, with cost inflation of 300 to 400 basis points partially offset by a higher average unit sale.

For the first quarter of fiscal 2022, the company expects net sales to increase in single digits from the first quarter of 2021 of $781 million and gross margin rate to be down approximately 400 points. base rate at the 2021 rate of 63.4%.

Ann J. Cox