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Abercrombie and Fitch has reported a 3% increase in net sales to $836m (£675m) for the first quarter of 2023.
The retailer’s signature brand, Abercrombie, reported $436m (£352m) in net sales while Hollister reported $399m (£322m).
Gross profit for the retailer was $509m (£411m), compared to $449m (£362m) for the same period last year. Operating income of $34m (£27m) and $38m (£30m) on a reported and adjusted non-GAAP basis respectively, as compared to operating loss of $10m (£8m) and $6m (£4.8m) last year.
For the full year, the retailer expects net sales growth in the range of 2 to 4% from $3.7bn (£2.9bn) in 2022. The current outlook assumes that Abercrombie will continue to outperform Hollister and the U.S. will continue to outperform International.
In addition, the company expects operating margin to be in a range of 5 to 6% and capital expenditures of approximately $160m (£129m).
Fran Horowitz, chief executive officer, said: “Fiscal 2023 is off to a strong start with first quarter net sales and operating margin above our expectations. Net sales grew 3% to last year, led by Abercrombie brands where we grew 14%, achieving the highest first quarter sales in more than a decade.
“Abercrombie’s offering is resonating meaningfully with our target customer, setting several other sales records this quarter across genders, categories and geographies.”
He added: “Looking ahead, we remain cautiously optimistic on consumer demand and our ability to react to a dynamic macro environment, further supported by our strong balance sheet.
“We are managing inventory tightly and each brand is in a position to chase demand. Importantly, we are progressing on key, strategic investments across stores, digital and technology to deliver growth on both the top and bottom lines from 2022 levels consistent with our Always Forward Plan.”
