Abercrombie & Fitch Is Another Retailer Shaking Off COVID-19
Abercrombie & Fitch reported better than expected quarterly results before the markets opened on Thursday, giving shares a boost.
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When Abercrombie & Fitch Co. (NYSE: ANF | ANF Price Prediction) reported its most recent quarterly results before the markets opened on Thursday, the lifestyle retailer posted $0.23 in earnings per share (EPS) and $698.3 million in revenue. Consensus estimates had called for a net loss of $0.83 per share and revenue of $658.44 million, while the fiscal second quarter of last year reportedly had earnings of $0.48 per share and $841.1 million in revenue.
During the most recent quarter, net sales decreased 17% year over year, while comparable sales increased 56%.
At the same time, digital revenue increased by 56% to $386 million, expanding the retail chain’s gross profit rate by 140 basis points and leverage operating expense, resulting in robust operating margin improvement.
In terms of its segments, Abercrombie & Fitch reported that Hollister net sales decreased 15% year over year to $429.2 million and Abercrombie net sales decreased 20% to $269.1 million.
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Management noted that the company ended the quarter with roughly $1.1 billion of liquidity, reflecting $187 million of operating cash flow generated in the second quarter. On the books, cash and cash equivalents totaled $767 million at the end of the quarter, versus $671 million at the end of the previous fiscal year.
Looking ahead to the fiscal third quarter, the company expects to see net sales down in the range of 15% to 20%. The company would not provide any additional guidance, citing uncertainty regarding COVID-19. Consensus estimates call for a net loss of $0.02 per share and $800.5 million in revenue for the quarter.
Abercrombie & Fitch stock traded up about 15% on Thursday, at $12.87 in a 52-week range of $7.42 to $18.83. The consensus price target is $12.25.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
