Don't call it a comeback — the new Abercrombie (ANF) has been here for years.
The youth apparel retailer capped off an impressive year on its latest earnings day after its stock soared 390% over the past year.
Abercrombie & Fitch's Q4 numbers, reported Wednesday, hit the mark on four fronts: Sales thumped estimates, earnings climbed well above expectations, and the key Abercrombie & Fitch division continued its turnaround.
Citi retail analyst Paul Lejuez said the quarter was "outstanding" in a note to clients.
Now, the main question facing CEO Fran Horowitz and her team is whether they can keep up the good times against the backdrop of cautious consumer spending. Doing so will be instrumental as investor expectations have crept considerably higher for Abercrombie amid its performance over the past 18 months.
This year will be all about proving the results of 2023 are sustainable, Horowitz told Yahoo Finance Live.
Horowitz added she sees a line of sight to Abercrombie & Fitch hitting $5 billion in annual sales, an "aspirational" target put out initially at a New York City investor day in 2022.
The company posted sales of $4.3 billion in 2023.
The earnings rundown
Net sales: +21% year over year to $1.5 billion, vs. estimates for $1.43 billion
Comparable sales: +16% vs. +15.7% estimate
Abercrombie & Fitch division sales: $755.2 million vs. $697.7 million estimate
Hollister division sales: $697.7 million vs. $724.4 million estimate
Gross profit margin: 62.9% compared to 55.7% a year ago, vs. estimates for 60.2%
Adjusted diluted EPS: +266% year over year to $2.97 vs. $2.82 estimate
What else caught our attention
The company ended the year with $901 million in cash, +74% year over year.
Inventories dropped 7% from a year ago.
First quarter outlook:
Net sales: Up by a low-double-digit percentage year over year
Operating margin: 8% to 10%, compared to 4.6% a year ago
Full-year outlook:
Net sales: Up by 4% to 6%
Operating margin: Around 12%, compared to 11.4% a year ago
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].
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