The Hollister Numbers You Need to Know
Hollister parent company Abercrombie & Fitch posted Q3 numbers last week that are worth reviewing because they underscore just how strong the market is right now for some retailers.
It also illustrates how others, such as Nordstrom, are not participating as fully in the retail boom.
In Q3, Abercrombie & Fitch Inc. posted its best Q3 operating profit and margin in close to a decade. Total sales rose 10% vs. Q3 2020 and 5% vs. 2019.
It was the highest Q3 sales since 2014 – despite supply chain disruptions and the company reducing its store space by 1.1 million square feet last year.
The U.S. led the way – total company sales in the region rose 17% vs. 2020 and 12% vs. 2019. Meanwhile, sales in EMEA and APAC fell 6% and 12%, respectively, vs. 2020.
The Hollister chain in Q3 saw a 10% increase in sales vs. 2020 and a 1% increase vs. 2019.
In the U.S., Hollister sales rose 17% vs. 2020 and 7% vs. 2019. Globally, it was the best Hollister performance since 2013 and the best U.S. performance since 2012.
The Abercrombie chain, which has struggled for years, is in the midst of a turnaround. Q3 sales rose 12% vs. 2020 and 10% vs. 2019. That is the chain’s highest sales since 2015 and the highest margin since 2013.
Stores vs. Digital
Interestingly, even with the strong results, sales at company stores globally have not returned to 2019 levels. Store sales rose 11% vs. 2020 but fell 20% vs. 2019.
Digital sales companywide rose 8% vs. 2020 and 55% vs. 2019.
The company has been ahead on the digital front for a while now, and digital accounted for 46% of total sales. The company launched same day delivery during the quarter.
Denim has been a key category for Hollister and the Abercrombie chain during its history, and currently denim is “on fire” with many wide leg fits popular, CEO Fran Horowitz said. Denim sales reached their highest level ever during the quarter, she said. Other clothing categories are also performing well.
The company believes its marketing prowess on social media is helping to drive results, and cited success with strategies such as live shopping events on TikTok and Instagram, exclusive social media product launches, in-app storefronts, augmented reality for Snapchat and relationships with a multitude of affiliate influencers.
The company overall has also moved from promoting its exclusivity under previous leadership regimes to focusing on topics such as diversity, inclusivity and mental health. Hollister has also launched a special program to support upcoming Latino creatives in music, fashion, and comedy on TikTok and Instagram. In addition, Hollister has signed a famous Fortnite gamer to its list of influencers.
When it comes to supply chain, the company was hurt during the quarter by shutdowns in Vietnam, and airfreighted a lot of goods to try to catch up. Executives said they are encouraged by recent improvements at ports.
When some product deliveries shifted into Q4, the company also adjusted its marketing plan as well. They plan to deliver new product up until Christmas time and are using the situation as a testing lab to see how customers respond to later deliveries during the holidays.
Q4 Forecast
The company is forecasting Q4 net sales to rise 3% to 5% vs. the same quarter in 2014.