Abercrombie & Fitch’s Fiscal 4Q17 Sales Top Estimates
Sales up 15.1%
In fiscal 4Q17, Abercrombie & Fitch (ANF) reported sales of $1.19 billion, which beat the analysts’ projection of $1.16 billion. On a YoY (year-over-year) basis, sales were up 15.1%. Strength in the Hollister brand, international operations, as well as DTC (direct-to-customer) sales has driven the increase in sales. The US segment was the biggest contributor to the top line with sales of $774.6 million, an increase of 13%, while the international segment added $418.6 million, an increase of 20%, to the top line.
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For fiscal 4Q17, Hollister sales were up 19% to $709.2 million, while Abercrombie reported growth of 9% to $484 million. Also, the extra week added 4% to sales, while favorable foreign exchange fluctuations in fiscal 4Q17 resulted in a 3% increase in sales.
To protect itself from the growing clout of online retailers such as Amazon (AMZN), Abercrombie & Fitch has been making investments to boost its e-commerce business. The company’s D2C sales accounted for 34% of total sales when compared with 31% reported in fiscal 4Q16. The mobile channel was the biggest contributor with over 70% of the digital traffic coming via this channel. The D2C channel saw comps (comparable store sales) growth of 18%. The conversion rate increased 14%.
Overall comps performance
The company’s comps saw growth of 9% in fiscal 4Q17 with US comps increasing 11%, while international comps were up 5%. Brand-wise, Hollister reported comps growth of 11%, while the company’s namesake brand, Abercrombie, reported comps growth of 5%. For fiscal 2018, management expects both sales and comps to be up in the low-single digits. Favorable forex movement is expected to add $50 million to the top line in 2018.
Urban Outfitters (URBN) reported fiscal 4Q18 net sales of $1.09 billion, which rose 5.7% from fiscal 4Q17 and easily topped analysts’ estimate of $1.08 billion. The company’s strong top-line performance was driven by positive comps witnessed across all the brands, namely Free People, Anthropologie, and Urban Outfitters.
In 4Q17, Gap (GPS) reported total sales of $4.8 billion in 4Q17, beating analysts’ estimate of $4.7 billion driven by strong comps growth of 5%.