NEW YORK - Abercrombie & Fitch Co. (NYSE:ANF) has reported a robust performance for the third quarter of fiscal year 2023, with revenues soaring to $1.06 billion, a significant year-on-year growth of 20%. The company's non-GAAP earnings per share (EPS) also exceeded expectations, reaching $1.83 and outperforming analyst predictions by a substantial 54.7%.
The impressive results prompted Abercrombie & Fitch to revise its full-year financial outlook upwards. A key highlight was the recovery in Free Cash Flow, which reached $223.6 million, a stark turnaround from the previous year's shortfall. Additionally, the company achieved a Gross Margin of 64.9%.
CEO Fran Horowitz attributed the successful quarter to accelerated net sales growth, particularly noting a 30% surge in Abercrombie brands and an 11% rise in Hollister brands. This led to an operating margin of 13.1%, reflecting the company's evolution from its roots as an outdoor gear provider to a prominent retailer in the young adult fashion sector.
Over the past four years, Abercrombie & Fitch has seen an annualized revenue growth rate of approximately 2.9%, with current revenues surpassing analyst estimates by about 7.7%. Sales forecasts remain cautiously optimistic, projecting a modest growth rate of around 2.8% for the coming year.
The retailer's strategic expansion is evident in its global presence, now boasting a total of 760 stores worldwide. Additionally, the brand has experienced a significant boost in Same-Store Sales, which rose by an impressive 16%, indicating strong consumer interest and successful adaptation to online retail trends.
Despite these positive financial indicators and market outperformance in areas such as same-store sales growth and EPS beats, ANF shares saw a decline following the earnings announcement, dropping approximately 4.9% to $68.75 per share in premarket trading Tuesday.
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