Abercrombie & Fitch Jumps On Q3 Beat; Picks Nigel Travis As New Chairperson

Abercrombie & Fitch Co ANF reported a third-quarter FY22 sales decline of 3% year-on-year to $880 million, beating the consensus of $831.13 million.
Adjusted EPS of $0.01 beat the consensus of $(0.15).
U.S. sales increased 3% Y/Y while International sales declined 18%.
The gross profit margin compressed 450 basis points to 59.2%. The operating income for the quarter was $17.5 million versus $72.73 million a year ago, with the margin shrinking from 8% to 2%.
The company held $257 million in cash and equivalents as of October 29, 2022. Cash used in operating activities year-to-date totaled $(301) million.
Inventories increased 36% to $742 million at the end of Q3.
"We are cautiously optimistic as the holiday season kicks into high gear. While the environment remains dynamic, we are focused on what we can control," said CEO Fran Horowitz.
Abercrombie brand sales rose 10%, while Hollister sales fell 12%.
The company said its results were driven by Abercrombie brands, where it delivered the highest Q3 net sales since 2014 and the tenth consecutive quarter of average unit retail growth.
Leadership Transition: ANF said Terry Burman will step down as Chairperson of the Board at the conclusion of the company's fiscal year ending on January 28, 2023.
Nigel Travis, current Director and Chair of the Nominating and Board Governance Committee of the Board, will assume the role of Chairperson effective January 28, 2023.
Outlook: Abercrombie expects FY22 sales to be down 2% - 3% (previous outlook down mid-single-digits).
It sees an FY22 operating margin of 2% - 3%, up from the previous outlook of 1% - 3%.
For Q4, ANF sees sales to be down 2% - 4%.
Also Read: Why Abercrombie & Fitch Shares Are Soaring Tuesday
Price Action: ANF shares are trading higher by 16.70% at $21.74 on the last check Tuesday.
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