© Reuters. FILE PHOTO: Abercrombie & Fitch products are seen at their store at the Woodbury Common Premium Outlets in Central Valley, New York, U.S., February 15, 2022. REUTERS/Andrew Kelly/FILE PHOTO
(Reuters) -Abercrombie & Fitch Co on Wednesday forecast full-year revenue growth above Wall Street estimates, as the company bets on strong full-price demand for its apparel brands on the back of a robust holiday shopping season.
Apparel retailers such as Abercrombie and Lululemon Athletica (NASDAQ:) have benefited from their efforts to trim inventories and introduce fresh styles on their racks during the holiday shopping season.
This also enabled Abercrombie to tone down discounts for its brands over the holiday period, which is typically skewed towards higher markdowns and promotions.
Net sales growth at its Abercrombie brand improved sequentially to 35% in the holiday quarter, from 30% in the third-quarter.
However, net sales growth for its Hollister brand was 9%, slower than the 11% reported in the prior quarter.
In January, Abercrombie joined Lululemon, and peer American Eagle (NYSE:) Outfitter in raising its fourth-quarter sales targets, in a move that pointed towards resilience among bargain-hunting customers.
The Gilly Hicks parent expects net sales growth between 4% to 6% for fiscal year 2024, compared with the LSEG estimate of 4% growth to $4.43 billion.
The company’s forecast comes in contrast to weak forecasts from department store retailers such as Nordstrom (NYSE:) and Macy’s (NYSE:) , who have cautioned about another year of strain on discretionary spend amid choppy macro economic conditions.
Abercrombie’s revenue rose 21% to $1.45 billion in the fourth quarter ended Feb. 3, topping analysts’ expectations of 19% growth to $1.43 billion.
Excluding items, the Ohio-based company earned $2.97 per share, ahead of estimates of $2.83 per share.
Shares of the retailer, which nearly quadrupled last year, are up about 60% so far this year. They were down about 3% in volatile premarket trade.
