Abercrombie & Fitch reports an increase in sales, reveals supply problems impacted holiday sales
Abercrombie & Fitch has published its festive season period (Q4) and 2021 full year financial results, which showed increased sales but also revealed that the company was hit hard by supply chain disruptions and COVID-related restrictions.
In fiscal year 2021 the company saw sales up 19%-20% compared to the fiscal year of 2020, which recorded $3.125 billion in net sales. Compared to net sales in 2019 of $3.623 billion, 2021 was up 2%-3%.
The company added that it expected its fourth-quarter sales to be up 4%-6% from 2020 levels, and flat to -2% compared to 2019, as they had been impacted by supply chain disruptions. It had previously forecast that sales in the festive quarter would be up 3%-5% compared to 2019.
Fran Horowitz, Chief Executive Officer said that while there was strong customer demand for products during the festive period, extended port and transportation delays meant that all its brands, and specifically Hollister and Gilly Hicks, did not have enough inventory in stock, which resulted in lost sales during the peak holiday selling period.
She added: "We believe that, if we had the inventory on-hand, we would have delivered sales within our previous outlook range. Post-holiday, as inventory has landed, we have experienced an acceleration in sales trend. Looking ahead, we expect to minimise the gross margin impact of late deliveries by balancing promotional depth and utilising pack-and-hold where appropriate."
The apparel retailer also said that it had been effected by "increased COVID-related impacts and restrictions". The company reported fourth-quarter sales of $1.122 billion in 2020 and $1.185 billion in 2019.
Reflecting on Abercrombie's overall performance and the upcoming year, Horowitz commented: "As I reflect on the past two years, we have implemented crucial, transformative changes to pivot our business model and strategically position our company and our brands for future growth. From reducing square footage by about 20% compared to 2019, to increasing our digital business to roughly 50% of our sales volume, to refining the purpose and positioning of each of our brands, we believe that our company has never been better positioned to increase shareholder value. I am excited for 2022 and beyond as we further strengthen our role as a leading global omnichannel retailer."