Abercrombie & Fitch reported record first-quarter earnings results Wednesday (May 29), attributing the gains in part to increased marketing spend and an improved omnichannel experience.
The apparel retailer’s highest first-quarter net sales ever came with an increase of 22% compared to the same period a year earlier, according to a Wednesday earnings release.
“Both brand families [Abercrombie and Hollister] are contributing nicely to our business results while expanding their customer base through increased marketing spend and improved omnichannel customer experience,” Abercrombie & Fitch CEO Fran Horowitz said Wednesday during the company’s quarterly earnings call.
The Abercrombie brand’s same-store sales increase of 29% exceeded analysts’ expectations of 17%, while the Hollister brand’s gain of 13% topped estimates of 8%, Bloomberg reported Wednesday.
“Our outstanding first-quarter results reflect the power of our brands and strong execution of our global playbook,” Horowitz said in the earnings release.
Abercrombie & Fitch’s “Always Forward Plan” playbook, which was announced at its June 2022 investor day, aims to drive global growth through a data-driven approach to store expansion as well as digital marketing and social selling, according to a presentation released Wednesday.
The retailer’s “enterprise-wide digital revolution” includes investing in customer analytics to improve customer engagement and investing in people, systems and processes to improve the customer experience, per the presentation.
The company’s sales channels are varied, with the Abercrombie brands selling 40% in stores and 60% digital, while the Hollister brand sells 70% in stores and 30% digital, according to the presentation.
The presentation said that teens “engage digitally” but “purchase in-store.”
As far as product assortments, the Abercrombie brands target millennials who are “fashion-obsessed” and “digitally-led,” while the Hollister brand is aimed at Generation Z shoppers who are “comfort obsessed” and “value versatility,” the presentation said.
Abercrombie & Fitch also raised its full-year outlook Wednesday. It now expects 10% net sales growth in 2024, up from its previous estimate of 4% to 6%, according to the earnings release.
“Our brands are delivering high-quality, on-trend assortments for new and retained customers across regions and brands,” Horowitz said in the release. “Importantly, we continue to make strategic investments across stores, digital and technology to further strengthen the company in pursuit of our long-term ambition.”
For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More