Abercrombie revenue beats on online investments, U.S. reopening

·1-min read
FILE PHOTO: An Abercrombie & Fitch storefront sign states "SALE" at the King of Prussia Mall in King of Prussia

(Reuters) -Abercrombie & Fitch Co reported a bigger-than-expected 61% jump in first-quarter sales on Wednesday, as the apparel retailer benefited from shoppers returning to its stores and using its beefed-up online business.

Shares of the Hollister and Gilly Hicks owner rose 11% as it also posted a surprise quarterly profit and predicted second-quarter net sales to be at or above the pre-pandemic levels recorded in 2019.

The company, largely reliant on younger customers, also said it expected a more normal back-to-school selling season this year as physical classes restart after a pandemic-induced halt.

The retailer's first-quarter sales were already 6% higher than 2019 levels, thanks to strong growth in its U.S. business after the lifting of COVID-19 restrictions.

Its digital sales soared 45% in the quarter to account for more than half of the total, as the company's investments to offer services such as curbside pickup during the health crisis paid off.

New Albany, Ohio-based Abercrombie, which earlier this month launched its Social Tourist brand in partnership with TikTok influencers Charli and Dixie D'Amelio, said it planned on investing more than $50 million in its digital channel this year.

"As we evolve our model, the line between stores and digital continues to blur," Chief Financial Officer Scott Lipesky said.

Overall net sales rose 61% to $781.4 million, beating a Refinitiv IBES estimate of $687.4 million.

Excluding items, the company earned 67 cents per share, compared with estimates of a 38 cents loss, helped by lesser discounting.

(Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni and Sriraj Kalluvila)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting