Abercrombie & Fitch Q4 Highlights: 3% Sales Growth, Bottom-Line Miss, Lower Inventories On Production Delays In Vietnam & More

Abercrombie & Fitch Co ANF reported fourth-quarter FY22 sales growth of 3% year-on-year to $1.199 billion, beating the consensus of $1.18 billion. Adjusted EPS of $0.81 missed the consensus of $0.86.
U.S. sales increased 9% Y/Y while International sales declined 13%. Abercrombie brand sales rose 14%, while Hollister sales fell 4%.
Gross profit margin compressed 260 basis points to 55.7%. Operating income for the quarter was $87 million versus $98 million a year ago, with the margin shrinking from 8.4% to 7.3%.
The company held $518 million in cash and equivalents as of Jan. 28, 2023. Cash used in operating activities for the year totaled $(2.3) million.
Inventories decreased 4% to $506 million at the end of Q4 as it fully lapped the late receipts experienced in 2021 due to supply chain delays and significant production delays in Vietnam.
"In a year with significant inflation and global macroeconomic disruption, our teams leveraged our agile operating model to redirect expense and inventory investments," said CEO Fran Horowitz.
Outlook: ANF expects Q1 net sales to be around flat to 1Q22 level of $813 million, against the consensus of $795.74 million.
For FY23, ANF expects net sales growth of 1%-3% (~$3.73 billion-$3.81 billion) from $3.7 billion in 2022, against the consensus of $3.71 billion.
Price Action: ANF shares are trading lower by 2.04% at $28.81 on the last check Wednesday.

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