Abercrombie & Fitch surprises with strong sales and profit growth

The US clothing group Abercrombie & Fitch Co. closed the 2023/24 financial year with a double-digit increase in sales. The company was also able to significantly increase its profits. Overall, the results published on Thursday were above market expectations thanks to a strong final quarter.

Sales totaled $4.28 billion (€3.93 billion) in the most recent fiscal year, which ended February 3. This exceeded the previous year’s level by 16 percent. Adjusted for exchange rate changes, revenue increased by 13 percent. In America, which is by far its most important market region, the clothing supplier achieved an increase of 18 percent (+13 percent adjusted for currency effects) to 3.46 billion US dollars.

The growth engine was the Abercrombie division with the brands Abercrombie & Fitch and Abercrombie Kids. Their sales increased by 27 percent (currency-adjusted +23 percent) to $2.20 billion. In the Hollister segment, which includes the Hollister and Gilly Hicks labels, sales rose by six percent (currency-adjusted +4 percent) to $2.08 billion.

The clothing retailer can increase its annual profit more than a hundredfold

Thanks to strong sales growth and a significantly higher gross margin, operating profit jumped to $484.7 million. This was more than five times higher than the previous year, when it was $92.6 million. The annual surplus attributable to shareholders increased from 2.8 to 328.1 million US dollars (301.5 million euros).

The company wants to maintain its growth path in the current year 2024/25: an increase in sales of four to six percent is forecast. Management expects the Abercrombie division to continue to grow faster than the Hollister segment and the Americas to continue to “lead regional performance.” The operating margin, which was 11.3 percent last year, is to be increased to around twelve percent.