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Abercrombie posts surprise quarterly profit

  

Resilient demand has led to a surprise quarterly profit for Abercrombie & Fitch. So the American apparel retailer is optimistic about the holiday season.

The company’s shares that lost nearly half of their value this year were up about 19 per cent after the company also reported third-quarter sales above Wall Street estimates, defying inflation’s impact on non-essential spending. So the company expects the fourth quarter to mirror more pre-pandemic holiday.

Abercrombie & Fitch’s attempt to revamp its inventory to get rid of casual and athleisure apparel that have fallen out of fashion and bring in new styles have attracted wealthier shoppers who remain unperturbed by decades-high inflation. Abercrombie expects fourth quarter net sales to fall about two per cent to four per cent in fiscal 2022, compared with analysts’ average estimate of a 6.3 per cent drop.

Abercrombie & Fitch has invested in loyalty programs and developed its direct-to-consumer and omnichannel capabilities. All of these steps have contributed to an improved top and bottomline. The company undertook a massive rebranding initiative in 2014, moving away from the reputation it had built over the past decade. The company’s store count has been reduced; stores now have a smaller footprint with larger fitting rooms, and are integrated with technology.

 
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