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Abercrombie & Fitch Rises on Earnings Beat

Abercrombie easily topped earnings estimates with revenue in-line for the fourth quarter.
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Shares of apparel retailer Abercrombie & Fitch  (ANF)  rose premarket Tuesday after the company reported fourth quarter results that topped analyst estimates for the quarter.

The New Albany, Ohio company reported fourth quarter earnings of $82.4 million, or $1.50 per share, on revenue of $1.12 billion. While both numbers were down year-over-year, earnings came in ahead of analyst earnings estimates of $1.22 per share while revenue was in-line with estimates. 

"We leaned into our infrastructure to grow digital to 54% of annual revenues while utilizing our lease flexibility to take approximately 1.1 million gross square feet, or 17%, out of our base," said CEO Fran Horowitz.

The company closed 129 locations that weren't flagships and eight flagship stores that were "tourist dependent" during the year. 

Digital sales rose 34% year-over-year and comprised 54% of full-year revenue in 2020. As a result, the company's gross profit rate improved 230 basis points to 60.5%

As of Jan. 30, the company had $1.1 billion of cash and cash equivalents compared to $671 million. 

"Our solid foundation and strong liquidity position enable us to be on the offense as we continue to focus on profitable topline growth, square footage optimization, digital transformation and global market share gains," Horowitz said. 

Earlier this month, the company's board replaced the company's existing 3.2 million share repurchase program with a new 10 million share authorization. The company said it returned $28 million to shareholders during fiscal 2020. 

Abercrombie & Fitch shares were rising 1.4% to $28.00 premarket on the news.