Abercrombie & Fitch eyes $5 billion in annual sales
Abercrombie & Fitch announced on Tuesday plans to reach $5 billion in annual sales in the long-term, as it eyes revenues of $4.1 billion to $4.3 billion and an operating margin rate at or above 8% for fiscal 2025.
The New Albany, Ohio-based company made the announcement at an investor day as part of its 'Always Forward' strategy, adding it plans to leverage its omni-channel capabilities and digital penetration to accelerate global growth across brands and deliver shareholder value, according to a press release.
“The company is in a dramatically different place than we were at our last investor day just four years ago. Today, we have clearly defined positioning at each of our global brands with unique edit points, a smaller, modernized and more profitable omni-enabled store base, digital penetration and meaningful cash generation," said CEO, Fran Horowitz.
"Our company and brands are purpose-led, and listening to and learning from our global customer is deeply ingrained in our thinking and culture in a way that it never has been before. We are committed to constantly adapting to meet and exceed their ever-changing needs, and I firmly believe that the changes we have made position us to deliver steady growth.”
By brand, the company's namesake Abercrombie & Fitch brand and Abercrombie kids brands are targeting 6% to 8% sales CAGR over the three years ending in fiscal 2025; while the Hollister brand is targeting a flat to 2% sales CAGR over the three years. Meanwhile, the Gilly Hicks brand is targeting a 15% sales CAGR.
However, Abercrombie & Fitch adults is expected to be the largest contributor to growth, the company added.
Coinciding with the longer term $5 billion annual sales target, Abercrombie said it is aiming for an annual operating margin rate at or above 10%.
“Over the last several years, we have consistently proven our ability to navigate through unprecedented challenges while maintaining a focus on making progress against our long-term strategic goals," added Horowitz.
"Our Always Forward Plan reflects the dynamic global, economic and political environment, with an expectation for known and unknown consumer pressures to emerge. This provides us with multiple avenues to achieve our targets, giving us confidence that we can meet our 2025 and longer-term plan.
"Going forward, we are focused on maintaining our expense discipline and plan to continue to seek expense efficiencies while protecting and funding our Always Forward targets and generating significant cash flow.”
In it most recent yearly trading update, Abercrombie recorded fiscal 2021 sales of $3.7 billion, up 19% compared to fiscal 2020, and up 2% as compared to pre-Covid 2019 full year net sales.
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