Abercrombie & Fitch Co.’s online sales rose 16% for the third quarter ended Nov. 3 to $243.6 million. That’s 28% of total sales for the apparel retailer. Abercrombie expects its e-commerce sales to surpass $1 billion for the year, which would be a 15.9% increase over the Internet Retailer-estimated $862.7 million it sold online last year.
The apparel company, which operates Hollister alongside its namesake brand, also announced that mobile accounted for more than 75% of the traffic to its e-commerce sites and apps, noting that its apps are the fastest-growing share of its digital revenue. Overall, the retailer’s comparable sales rose 3% year over year in the quarter to $861.2 million, but an extra week in 2017 causing a shift in reporting dates means the actual growth from $859.1 million in the same period last year is flat.
Part of the rise in digital sales has been an expansion of its omnichannel initiatives, said CEO Fran Horowitz on an earnings call transcribed by Seeking Alpha. Abercrombie, No. 69 in the Internet Retailer 2018 Top 1000, has seen a strong rise in buy-online-pickup-in-store and order-in-store usage globally, after finding success with the programs in the U.S., she said.
The apparel brand is also altering its operations in a number of ways to stay nimble as the fashion world changes. Chinese tariffs have led the company to look elsewhere for production facilities.
“We have been on a journey to reduce our dependency on China over the last several years and will continue that journey,” Horowitz said in an interview with Bloomberg. “We have an opportunity to shift production to new partners and current partners outside of China.”
The apparel industry is scrambling to react to the trade tensions, with a 10% U.S. tariff on $200 billion of Chinese imports set rise to 25% in January. Abercrombie & Fitch has already reduced its imports from China to about 25% of products it sells in the U.S. That’s down from “substantially” higher three years ago, chief operating officer Joanne Crevoiserat said in the same interview. The tariffs that have already been leveled have not had a material impact on Abercrombie, she said.
Abercrombie also consolidated its executive team, combining the different brand presidents into a single role for the president of global brands, which is now held by previous Hollister Co. head Kristin Scott. Abercrombie brand president Stacia Andersen is leaving the company. The new role will provide more agility and efficiency for both brands, Horowitz said on the earnings call.
In other earnings news:
- Apparel brand Express Inc.’s (No. 97) e-commerce sales grew 23% year-over-year in the third quarter ended Nov. 3. Online sales now account for 29% of the retailer’s overall sales. That means its online sales were roughly $149.3 million for the , though the company didn’t disclose the exact figure. That’s two straight years of 23% e-commerce growth during the third quarter and follows a 37% increase last quarter. CEO David Kornberg pointed to omnichannel strength as a driver for both online sales and total sales, which grew 2% for the quarter.
- Fashion conglomerate PVH Corp. (No. 63) said e-commerce accounted for 10% of its sales in its third quarter ended Nov. 4. That would put the retailer’s online revenue at about $233.7 million. The owner of brands like Tommy Hilfiger, Van Heusen and Izod said digital sales grew 20% over the same period last year.
- GameStop Corp. (No. 40) boosted digital sales 29.5% year over year for the third quarter ended Nov. 3 to $341.6 million, the video game retailer reported. A rise in the purchase of digital currencies used in games helped drive the spike. Overall sales were up 5% for the quarter over the same period last year, which cut its forecast for the year, suggesting that the holiday season will be a bad one for the world’s largest video game retailer. GameStop said on Thursday that it was still talking to third parties about a possible sale. Still, investors have been losing hope that a takeover is close.
- Dick’s Sporting Goods (No. 54) reported a 16% year-over-year increase in e-commerce sales for the third quarter, but the sporting goods retailer didn’t offer exact numbers. Same-store sales declined 3.9% for the quarter ended Nov. 3, and overall revenue was down 4.5%. CEO Edward Stack said e-commerce now accounts for 12% of overall sales, which means online sales generated about $222.9 million. The sporting goods retailer is investing heavily into its digital growth, with new fulfillment centers planned for New York and California to bring two-day shipping to customers across the country, Stack said in the earnings call transcribed by Seeking Alpha.
Bloomberg contributed to this report
Favorite