Abercrombie & Fitch Co. is finally showing some green shoots for its core Abercrombie brand.
For the three months ended Feb. 3, net income jumped 52.1 percent to $74.2 million, or $1.05 a diluted share, from $48.8 million, or 71 cents, a year ago. On an adjusted basis, earrings per share were $1.38 for the quarter, versus 75 cents a year ago. Net sales rose 15.1 percent to $1.19 billion from $1.04 billion. Boosting the quarter’s results was a comparable sales gain of 9 percent, with Hollister up 11 percent and Abercrombie rising 5 percent.
Wall Street was expecting EPS of $1.10 on sales of $1.16 billion.
Shares of Abercrombie were up 7.4 percent to $22.92 in pre-market trading at 9:06 a.m.
Fran Horowitz, chief executive officer, said, “We are pleased by our performance, delivering positive comparable sales for the fourth quarter across brands, channels and geographies and more than doubling our operating income. Our focus on staying close to our customer, executive to our playbook and maintaining our disciplined approach to expense management delivered a strong performance on both the top and bottom line.”
The company said operating income more than doubled to $140.3 million for the quarter.
The ceo also said 2017 was a year of “significant progress.” Some of the milestones she highlighted include Hollister’s growth to $2 billion in sales, and its core Abercrombie brand returning to positive comp sales for the fourth quarter. “We continue to improve the customer experience with ongoing investments in loyalty programs, stores, direct-to-consumer and omnichannel capabilities.”
By brand, the company said net sales rose 13 percent to $709.2 million for Hollister and up 9 percent to $484 million for Abercrombie. By geography, net sales rose 13 percent to $774.6 million in the U.S. and up 20 percent to $418.6 million in overseas markets. Direct-to-consumer also grew, increasing to 34 percent of total company net sales, versus 31 percent in the same year-ago quarter.
For fiscal 2018, the company is projecting comps to be up in the low-single digits. Net sales is also expected to be up in the low-single digits.
The company said it plans to open 21 full-price stores during fiscal 2018, including 11 in the U.S. and 10 in overseas markets. It also expects to close up to 60 stores in the U.S. through natural lease expirations.