Abercrombie & Fitch Co. soars most in three years after third-quarter revenue topped analysts’ Estimates
Abercrombie & Fitch Co. has climbed the most in 3 years after third quarter revenue topped the estimates of analysts. Rebounding sales at its Hollister unit proved helpful in soaring. In a statement on Friday, the New Albany, Ohio-based company said that revenue in the quarter was $878.6 million.
Although it was 3.6% down from a year earlier, it has topped $862.8 million average projection of analysts. The results have shown that the turnaround strategy of Abercrombie has started gaining traction, mainly at its younger, Southern California-inspired Hollister brand.
The company has introduced fresh, stylish products and updated stores, at both the Hollister and Abercrombie units, and has turned down the music and raised the lights for bringing customers back.
During the Q3, comparable sales at Hollister, which accounts for over half of the revenue of Abercrombie has gone up by 3%. Analysts had projected a 1.1% drop.
In an interview, Abercrombie Chairman Arthur Martinez said even then, after dismal reports from mall-based competitors such as Macy’s Inc. and Gap Inc., the company has been taking a cautious view of the Q4, which will be possibly characterized by high promotions and slow foot traffic. The company is estimating that Q4 comparable sales will be slightly changed.
Martinez said, “We’ve had good growth in our conversions once we get them in store, but pure traffic number is challenge for all tenants in the mall. When it comes to our investors, being any more ambitious in our outlook would have been a mistake”.
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