Abercrombie & Fitch (NYSE: ANF) experienced a 61% increase in first-quarter sales on Wednesday, as shoppers return to stores and continue to buy online. Shares were up 6% amid the news.
The retailer reported a net income of USD41.77 Million, compared to the previous year’s loss of USD244.15 Million. Meanwhile, operating income for the three months ended May 1, totaled USD57 Million.
Fran Horowitz, chief executive officer, says “2021 is off to a strong start. We built on the significant progress we made in 2020, registering our best first quarter operating income since 2008. The first quarter is evidence that our shift to a digitally-led global business model is working…We remained focused on funding key investments in customer-facing initiatives and delivered significant first quarter operating leverage.”
Digital sales were responsible for more than half of first quarter revenue due to the company’s added services such as curbside pickup throughout the pandemic. Furthermore, the company launched a Social Tourist brand with TikTok Stars Charli and Dixie D’Amelio, which it says has received an “amazing” reaction from consumers. Abercrombie aims to attract young shoppers before the back-to-school season through the brand.
“Momentum has continued into the second quarter across brands, and early reaction to our newest member of the A&F Co. family, Social Tourist, has been amazing,” Horowitz said.
Following the rollout of Covid-19 vaccines, U.S. retailers have reported a rise in momentum as customers venture out and return to stores. Additionally, people have begun to shop and purchase attire with their government stimulus checks.
Abercrombie & Fitch earned USD0.67 per share, excluding items, compared to analysts expected loss of USD0.38 a share.
“Our solid foundation and strong liquidity position enables us to be on the offense,” Horowitz said. “We remain focused on profitable topline growth, our ongoing digital evolution and our growth vehicles, including Gilly Hicks, and are committed to thoughtful expense management and global square footage optimization. Although the global landscape remains uncertain, I am excited about the future and more confident than ever in our ability to drive sustainable, long-term operating margin expansion.”