- Abercrombie & Fitch Co (NYSE:ANF) reported fourth-quarter FY21 sales growth of 3.5% year-on-year, to $1.16 billion, missing the consensus of $1.18 billion.
- Net sales declined 2% compared to pre-COVID, 2019 fourth-quarter net sales.
- Digital net sales were $556 million or 48% of total net sales versus $475 million or 40% in Q4 2019.
- The U.S. sales climbed 7% Y/Y while International sales declined 4%.
- The gross profit margin declined 220 basis points Y/Y to 58.3%. The operating margin was 8.4%, and operating income for the quarter fell 15.3% to $98 million.
- Adjusted EPS of $1.14 missed the consensus of $1.27.
- Inventories increased 30% Y/Y to $526 million due to higher inventory in-transit and increased freight costs.
- The company held $823 million in cash and equivalents as of January 29, 2022. Cash provided by operating activities for the twelve months totaled $274 million.
- Outlook: Abercrombie sees FY22 sales growth of 2% - 4% Y/Y. The company expects FY22 gross profit margin to contract by 200 basis points Y/Y, with 300-400 basis points of cost inflation partially offset by higher average unit retail.
- For Q1, Abercrombie expects net sales to be up low-single-digits and gross profit rate to be down around 400 basis points.
- Price Action: ANF shares are trading lower by 16.7% at $29.86 on the last check Wednesday.
