Abercrombie & Fitch observed strong demand for its apparel products during the holiday season, leading the retailer to raise its Q4 sales forecast.
The company is expecting its net sales to see a 1% to 2% increase for the quarter, a significant improvement over its previous forecast of a 2% to 4% decline.
The company seemingly benefited from its inventory optimization efforts, which included reducing the stock of casual wear and athleisure and introducing new styles that helped win over affluent customers. That said, the company still expects sales of its Hollister brand to be lower than in the 2021 holiday season.
Overall, the company is forecasting its Q4 operating margins to be in the 6% to 8% range, which will be higher than its previous estimate of 5% to 7%.
Abercrombie & Fitch was not the only retailer that seemingly benefitted from getting its inventory in order. American Eagle Outfitters said its profit margins and revenue estimates are likely to come out on the higher end of its forecast, Reuters reported.
Still, others such as Lululemon and Macy’s struggled to fair well. Lululemon, for one, lowered its Q4 gross margins expectations, while Macy’s said its holiday sales would be on the lower end of its projections.