Teenage dreams
Last summer, we explored how Abercrombie & Fitch — once the aspirational brand for an entire generation of teenagers — was trying to turn its struggling sales around. Out was the previous strategy, which included only targeting the “good-looking, cool kids” (per the company’s former CEO); in is a revamped A&F, focused on broadening its appeal beyond just T-shirts and jeans for a select crowd.
That strategy is working.
Indeed, A&F reported on Monday that it had sold more than it expected over the crucial Christmas and holiday season, with its ranges finding success among female and Gen Z customers.
The company now expects to grow its revenue 14-15% for 2023. The news sent A&F stock up 6% on the day, building on what has already been a white-hot 12 months for the fashion brand, having seen its shares rise 238% — more than the 234% rise that Nvidia investors have enjoyed throughout the AI boom. Perhaps most impressive, though, is that A&F has managed to reverse its revenues while keeping an eye on the bottom line — its latest financials reveal an operating profit of $138m, nearly 8x what the company managed in the same quarter one year ago.
