For the fourth quarter, Abercrombie & Fitch’s net sales of $1.2 billion increased 3% on a reported basis and 5% on a constant currency basis.
For the full year, net sales of $3.7 billion were roughly flat on a reported basis and up 2 percent on a constant currency basis.
Net earnings per diluted share were 75 cents and 81 cents on a reported and non-GAAP adjusted basis, respectively, compared to $1.12 and $1.14, respectively.
Full-year net income per diluted share was 5 cents and 25 cents on a non-GAAP reported and adjusted basis, respectively, compared to $4.20 and $4.35, respectively, last year.
Commenting on the financial results, Fran Horowitz, the company’s chief executive, said: “The results came from continued, strong momentum for the Abercrombie & Fitch brand and sequential improvement at Hollister as we continue to stabilize the brand’s performance. As we look to 2023, we remain cautiously optimistic about consumer demand. Our Abercrombie & Fitch brand continues to be an industry leader, and the multiple actions we’ve taken at the Hollister brand have resulted in a sequential improvement in net sales trend.”
Fourth quarter gross margin of 55.7%, down 260 basis points, operating income was $87 million and $92 million on a non-GAAP reported and adjusted basis, respectively, compared to $98 million and $100 million last year.
Gross margin for the year was 56.9%, down approximately 540 basis points, while operating income was $93 million and $107 million on a non-GAAP reported and adjusted basis, respectively, versus $343 million and $355 million, respectively . last year.
For fiscal 2023, the company expects net sales to grow in the range of 1 to 3 percent from $3.7 billion in 2022, with the expectation that Abercrombie will continue to outperform Hollister and the U.S. will continue to outperform internationally. Operating margin is expected to be in the range of 4 to 5 percent, which includes a benefit of about 200 basis points from full-year 2022 levels.
For the first quarter of fiscal 2023, the company expects net sales to be roughly flat to the first quarter 2022 level of $813 million and operating margin to be in the break-even range at 2 percent compared to negative 1 percent in the first quarter of 2022;