Abercrombie & Fitch Q3 Earnings Beat Estimates; Plans $500M Stock Buyback

Abercrombie & Fitch Co ANF reported third-quarter FY21 sales growth of 10% year-on-year, to $905.16 million, beating the analyst consensus of $896.86 million. Net sales improved 5% as compared to pre-COVID 2019 Q3 net sales. Adjusted EPS of $0.86 beat the consensus of $0.66.

• The digital net sales increased 8% Y/Y, representing 46% of total Q3 sales.
• The U.S. sales climbed 17% Y/Y while International sales declined 4%.
• The gross profit margin declined 30 basis points to 63.7%. The operating margin was 8.0%, and operating income for the quarter rose 24% to $72.7 million.
• The company held $880.3 million in cash and equivalents as of October 30, 2021. Cash provided by operating activities for the nine months totaled $131 million.
• Abercrombie & Fitch's board approved a new share repurchase program of up to $500 million of common stock, replacing the February 2021 program of 10 million shares, which had 3.9 million shares remaining.
• "The start of the holiday season has been promising. Customers have come out early to shop and have been responding well to assortments," said CEO Fran Horowitz.
• "We continue to actively manage through ongoing supply chain constraints, including production and delivery delays and elevated costs, and are confident that we have the product, marketing voice and omnichannel experience to surprise and delight new and existing customers throughout the fourth quarter."
• Price Action: ANF shares are trading lower by 15.5% at $39.73 on the last check Tuesday.