ANF - Earnings call transcript Q1 2022 | Abercrombie & Fitch Co.

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Operator

Good day and welcome to the Abercrombie & Fitch First Quarter Fiscal Year 2022 Earnings Call. Today's conference is being recorded. [Operator Instructions] We will open the call up to take your questions at the end of the presentation. We ask that you limit yourself to one question during the question-and-answer session. At this time, I would like to turn the conference over to Pam Quintiliano. ma’am. ahead, go Please

Pam Quintiliano

morning to Good XXXX first earnings call. and you. our welcome quarter Thank

statements on subject the that are and under today. Securities materially differ is to Earlier Please the cause Executive today XXXX. detailed our A is statements our earnings me Joining call website are available is section. to of could Commission. uncertainties any Scott Safe the issued first Exchange these in the call in mentioned made on Chief keep Also contained to subject release, Litigation we on which These Officer; at with on from Fran presentation. discussion Lipesky, Financial Harbor Investors of Private the company's morning, the are an Officer. risks provisions that corporate.abercrombie.com results filings forward-looking of investor and this website expectations our mind uncertainties Reform quarter and the the and and factors Chief Act Horowitz, actual we forward-looking Securities assumptions available

to we non-GAAP addition, referring call. certain be will the financial measures In during

Additional issued I measures this the a in are With non-GAAP release Fran. details adjusted call financial included reconciliation of GAAP that, over the will and turn morning. to earlier to

Fran Horowitz

of Good to our only goal, which we doubling results. different. anchored morning. operating levels. plan. of June corporate more our Since forward operating our it, of what's our execute to At there, Last global we another volatility. phase the XXXX you we quarter, we in discuss In and and will we This Thank of about tripling we transformation achieved than XXXX, discuss on business. but our to on our update controlling what to journey margin our progress made we portion that how the always of control to you things We quarter goal the next surpassed key can important not progress. From were for significantly call navigated little focused a our drive first from will joining dedicated earnings first will going XXth our us sight today Investor approach we our we our upcoming are talking Day, have remained a period yet regularly lost initiative, never margin. year,

March, customers, significant plans delivering best of QX associates, in-person exceed much the several COVID sales since pressures, stimulus headwinds, returned last Ukraine. from a Our revenues in of XXXX and inflationary partners. communities, China, in restrictions the including learning our global We major lapping and despite and U.S. the our conflict

the EMEA low rose market continued was For remains a lockdown. our on X% top of that last from registered the largest reopening China above digit accelerated year. due the related year, outlook to quarter, APAC, By quarter region, of increase, total international largest last Abercrombie region, company in UK. while for In and from the COVID last flat. to challenged benefiting country our our outperform a rising single year-over-year gain revenues XX% X% XX% increase. U.S.

experience Our higher from healthy. we achieved were and voice, global product, our eighth lower ticket our to to continue slightly quarter as benefited AUR and and revenues promotional Customers improvement of favorably activity. respond consecutive we

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offset and to tightly and manage these action to inventories and opportunities elevated. freight expect to costs. material remain our we expenses portion plan costs ahead, Looking raw We of a

do and trimming our opportunities these areas growth that evaluating not carefully longer-term are support plan strategies. on We

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for Spring results. assortment dress Easter and comfy break drove Our

our had ready for franchise were active, for the play and life stuff, made our ever and cool swim essentials we collections, QX addition, In season well-received. best

our Turning delivered trends has sales yet to only last America, to lap quarter, Hollister, which from stimulus since back includes pre-pandemic dramatically and improved last behind returned XXXX Internationally, North not second Gilly business although Hicks we levels. best and in mini Tourist. in last to Social as March. even In we the school season year the results year

quarter. in-line Taken our with together, for global expectations were the declining sales X%

and quarter like and assortment, skinny men's in items swim. our important of led emphasize women's the We our In which must we in first embraced in and fashion win continue XX an fleece the categories, experienced water newer part remains to way wardrobe. customer dresses our wovens and denim, although strength top

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opened talk outperforming key very but in in We're our stores were let's Hicks excited carveout least, introduce our has store and plan in where the global balance Gilly [Uber few our about year, throughout ahead. Hicks, these global been updated Carnaby the not the updated EMEA locations, Social including Street response about store of Tourist. be which Central we We elements House] ago side-side-side weeks locations of Gilly more bringing recently to the opportunity to Now, chain. to in store [ph] this standalone Last continue summer. also with first Customer encouraging customer. growth incorporate London standalone concept Germany our

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normalcy. to discuss an health moment thoughts Before The turning it consumer. to global a seems on our I weather It want the though our interesting collectively is the we to it social that return seasonal to a the over become Scott, two more the time. as started is wages take ready to of our currently and to has missed some many hunger form in to of of In U.S. plus are participate largest unemployment are high there’s over years. last and low, activities were market,

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equipped to our well the playbook. customer close are its balance and we strong We proven are to current executing our and our sheet, With challenges. environment to navigate staying

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Scott Lipesky

good Thanks Fran morning. and

have the financial this Starting several only Over basis. two-year period. comparisons year discussions providing past on been will and focus on years, we the quarter, one a ago our

Tourist the low adverse estimated of net Hollister, expectation net Now respectively. since on to sales highest China. volatility region, first U.S. an expectations COVID-related compared were X%. last impact above increased includes currency quarter of compares the QX XX% the despite This Gilly and Social Net to to and prior internationally. of and foreign XXX to sales sales mostly our single rising larger and international, in-line quarter, COVID-driven and were were XXX in restrictions point our year-over-year the our were at Sales with results. increased for out QX lockdowns sales By XXXX. we at In kids, a Parsing which up as into delivered year Hicks X% expectation includes coming our million, digit markets. XX%, lifted increase, from flat year, ahead growth basis which X% in declining XXXX XX%, combined EMEA in Abercrombie,

of COVID-related which largest the a results, in were although Shanghai, APAC, biggest country markets remained EMEA, one our led quarter. is the in improvements see and with in in in France pleased region. challenge UK, In Germany to Our China year-over-year the later prolonged a lockdown we

Moving on gross profit. to

rate year. was Our versus XX.X% last XX.X%

by registering which AUR selective more we AUR gains, the and first quarter. AUR in eighth was for factors. increase to by driven time and ticket two growth reflecting breadth took continue quarter offset AUCs, our We promotional consecutive of this reductions the than depth activity increases, higher of

In $XX In volatile freight rates. were prove outlook highly chain our costs. environment, First, million supply global freight costs a freight higher lower the above be $XX than rates above total, our actual year estimate. to roughly expected last approximately million than and estimated the current and

Second, the decision as of sell proactively the of which Hollister to late the our in our in Vietnam related goods our good the receipt highest unseasonably Gilly gross spring the in holiday temperatures sales with margin inventory clearance a came we causing reminder position rate. advantage These all to exposure delays. QX a than a Ending through lower goods reduction quarter, accelerate brands. made cold is and to take had Hicks, in

QX the rising impact in of to beyond both Looking-forward, and lap a we portion from from expect these becomes of factors sales inventory smaller inherently rates significantly we moderate year our mix. carryover freight as and last

of playbook made and realized ports place product our health origin. of with efforts diversifying have the diversifying QX stock further of into and carriers countries our our entry, sourcing in multiple as we to on a of Moving We include and inventories. much better in adjusting These our the product calendars, timely came benefits deliveries. to adjustments the our sure to

in with these result a increase. pending chain. inventory in-transit year each points to higher additional around the expect costs flows multi-year predictable efforts up XX up a and freight with inventory XX% collective We inventory percentage We units shocks and to XX% last off ended low more supply the unforeseen contributing total QX to

operating non-GAAP pre-tax approximately increase we receipt impairment basis. $X.XX. income the COVID-related asset million, This adversely remain last and guard an net higher per related of rate in by charges, government year, effective inventory XXXX million increase impairment compared where was impacted which are quarter X.X%. and recognized last results of loss non-GAAP excluded marketing of half adversely product of year. The to now we potential last inventory year. operating due loss on $X XXX Last a expect rest as compared We we million. liquidity throughout $XXX an above the half assistance of the we QX last other rent the digital delays against $X lapping share disruptions. results year approximately cash tax flow the year QX As income other look impacted at XXX investments $XXX and expense. look our the I'll of of fulfillment pre-tax year Excluded was and by per excluding an to to to compared we $X.XX abatements which and to income chain results to to the million year, million with charges, million of this compares in share we ended $X rest had $X.XX, expense, million Net $XX with Operating our $X.XX. of QX levels saw was from sheet, to million, diluted Taking supply operating adjusted year. last cover of results to early asset balance

During expect excess the XX.X shares shareholders million. program. start we In XX% had We repurchases. $XXX the approximately and through returns utilizing At the our of million in quarter, million XXXX share approximately progress for quarter-end, repurchased authorized down quarter, we investments, made X.X to continued liquidity and million share with to previously outstanding, XXX to other first further with repurchase excess approximately continue from under remaining shares we price, our related putting technology pending to to and we digital share focus the share the XXX to to market maintenance. committed stores accelerate be half related conditions, expect ability work in XXXX investments on repurchases to fiscal about business. million and On CapEx remain and half cash to and

for XX%. prior were up expect with our base, now we negotiations than half. openings assumption of around have to This around XX from partners. our we higher opener for be thoughts last stores the year. our weighted open to our year, we XX to the be time renewal, stores. new I'll close with In-line few up reminder, year, we These XX XX% will projections, the this back first our pending XXX roughly leases when the towards this the and is year decade landlord year, with net over this of remainder store up expect a stores new a which closer prior a finish years expect As in to on of approximately

As release, how are we provide noted updating press guidance. in our we

reasoning sales forward, is we The Going provided outlook. margin and two-fold. a will operating

our industry better this aligns First, approach peers.

Second, with flex Vietnam pressure In also From costs, volatility in which operating to to of will similar chain a and consumer on year. negative. replaces related lockdowns remainder an are perspective, full-year and for assumption rates and freight outlook, expect experienced positive at that shutdown, in the inventory and but swings, as levels expenses anticipate or does likely our response demand year we previous to last the current freight peak material the we raw continued unforeseen remain the our closely monitoring not that our inflation China. a delays outlook, due are we making outlook the are of magnitude for supply updated

freight reflecting effective XXX the combined outperformance previous impact as the foreign sales, planning from consumer this currency rate is adverse Net point partially range X% XXX QX. from in to inflationary estimated and currency, are Operating costs, and billion. up a impact margin X%, range outlook basis pressure on down to raw X% and demands, approximately to material to X.X our of level an in an be X%, X% flat offset follows: basis mid-XXs. of we sales in For full-year, Embedded in of approximately estimated from points by XXXX to higher combined tax foreign and lower the of adverse

XXXX rate million. an Net For points XXX sales single margin rate lower of driven approximately is the pressure low we decline a digits range the from currency in of XXs, and remains adverse of year-over-year be COVID-related to and China point an levels and are consumer approximately inflationary to basis to tax level impact in planning sensitive mid-to-high XXX Embedded higher and demand. Operating of raw XXX adverse material impact X% effective estimated outlook the quarter, foreign an freight in X% at due approximately in on to by down lockdowns follows. costs, the income. assumed this second basis as as an with

the profitability As through remainder to we intend investments. near-term with year, we look long-term the balance of strategic

we real in not the promotions on offset of to impacts limited but during While expect profitability, line not region, periods, and we inventory expect to, and we time, peak our reducing increasing to strategically do depth the managing do flows drive and top ensure tickets maximize fully efforts headwinds freight to selling by breadth commodity including reduce season to in we beyond. To to and well believe growth, We spend and advancing digital, customer investing long-term, drive brands we store expenses. our for AUR and experience, continue long-term non-customer and strategic while the and specifically are finish for facing reducing the our prioritizing investments must up, believe people, data, facing positioned summer capabilities our technology.

sharing in evolved margin deliver Day levels, We ready we our model confident inflation. to look operating operator, with in and are With more expectation are our at weeks. forward a for significant Investor that few an to our above you questions. despite current We business pre-pandemic

Operator

Telsey Instructions] begin with Group. We with [Operator Telsey Dana

Dana Telsey

morning, Good everyone.

about now, then of growth and does you this on or go breaking talked are that the around in about at and it Hollister how demand Hollister you're the region? you're the inflationary go forward? arrives forward brand think Thank planning you're what's and game differ impact you promotions you. plan that looking when And about how I markdowns think X%, out? forward inventory challenging going thinking you business, down uncertainty the or As by How environment given

Scott Lipesky

it’s Hey, I’ll kick Alright, this Dana. off. one Scott.

materially, talked all is sneaking recently. those some of happy QX, in plus last our Let's the on as currency, coming We growth. did four that quarter. in QX, that in the One which some start results solid year see impact we've we to late impacts with think about of demand. strengthen about See, with the through dollar pretty foreign seen we inflationary – U.S.

and a So off end point get growth. around the towards quarter of to QX of that started the that knocked us

we have of about we As QX, some those same impacts carrying think over.

year. is China foreign the in then the impact And consumer. about will QX based versus and us XXX for have those in, last into weeks. this inflationary And Where with kind about adding here. points what we're embedded coming all hit the We slightly XXX does we're quarter quarter basis on currency factors that impact first we're just negative us of operating basis date points it where backs on into the for three to here

tough but I make we're offset any are against So, to out. was mini that see think to not kick consumer the a the products, comp that how better, about Fran, that's did last going in have that school can great just assumption time great Obviously things it data we'll to on we'll everything And great period. that against back see be going up stay and experience how that is have year, as QX through. get dramatic we then the Hollister we we March We'll get marketing, delivering plays over the today. that same. to before to Not and because worse inflation expected. March the pretty minus plays doing that, here, up any Hollister, X in

was to that it I'll kick Fran. the So and start over

Fran Horowitz

Scott. Thanks

sort Scott So, Hollister, a bit on Dana said. what little of just to echo

on product. pleased Hollister. be to So, acceptance and the performance in consumer U.S. up strong X% we It we are was our continue from seeing with

you part bit. parse said, to a have the branded little Scott as So,

much penetration business, We strong for Hollister a [indiscernible], from perspective. which have an higher with been good has our international U.S.

a well. with to shutdowns clearly, go COVID tough and see back EMEA happening and So, the APAC from opportunity starting some we're there there nice as coming

to We're to focused our consumer. school. focused the and to We're more come. looking XX forward Top So, on we're on back

Dana Telsey

Thank you.

question to a with from Now, Tarlowe Corey moving Jefferies.

Corey Tarlowe

Hi. Good my taking questions. for and morning you

EBIT the of of given discuss help secondarily, rest the the you to X% X% performance, X% witnessing? in an should some then And the you seem can full-year X% be margin to pressures that you're you're Firstly, place outlook the mitigate of margin that would margins? cadence that cost XQ we the have It EBIT and improvement thinking guide how guide to the embedding throughout initiatives Thanks. XQ year? savings in about

Scott Lipesky

Corey. Hey, Yes, one. I'll this grab

really together. the start margin, EBIT I'll all ties So, with

So year-over-year down QX, those driven yes, so costs. year, from freight X% really by to last X%,

about get expense X%, the and we much full-year to back based specifically business, in the better and of leverage base we the can more back half X% half in at the tend to in As the our think on being sales we QX. have seasonality

technology what the we we're looking from the So, we key some of to inflationary because anything is short-term the expenses to also need non-customer is then long-term focused some on the discretionary issues. back line. are investments midst going the We're long-term of that people. at That in these top but drive they're marketing some one, those and strategic is, facing, are and pausing step for to digital those investments those, number and and not that expenses key and making going of we expenses, making to the continue on path with of

to the up far AUR going growth. AUR very faster we quarter AUR that the the and P&L have in costs also take we but down coming growth XXXX. up going on to than consecutive had this AUR, in can strong with of year seen growth pleased double-digit are look top We back just AUR growth. continue so of We’re eighth to we're drive our The and

comfortable in at we're our going path, inventory inventory feel balance comes keep we levels and So, and with down number great marketing to point. great that really continue one our it product, this let's check but on

Corey Tarlowe

Understood. very Thank you much.

Operator

a moving question to from Now Paul Hughes with Citi.

Paul Hughes

do you inventory, where prices, expect the each of on bit higher out curious your at environment you should XQ Thanks the more year? pass through just a of give end Scott, regions shake then pricing And just compared the Thanks. the to would you number guys. that balance the what and in ability in ago? opportunity curious how and about you little to detail months thinking for can we of that expect Hey. are three characterize just I'm to your how

Fran Horowitz

will I with start morning. good Paul, on first pricing. Hey question the

eighth exciting. We finished consecutive quarter growth. our it's AUR of So, just

that year's on was fact of growth. top last double-digit In

that that voice responding product our consumer tells really price, or is So us in our our to experience. our

the been through. seen opportunity is see growth us. have push We've we we continued exciting the balance less promotional opportunity see to also able that through also that We pre-pandemic, for than believe to have which AUR So, of to an an be opportunity year.

Scott Lipesky

right. All

move on to Let's inventory.

inventory, QX level. just to real thinking quick So, and pause about I want reiterate

last So, up XX% of year.

is We That absolutely have around XX%. units purposeful. up

earlier faster, than the We chain are units delays. because bringing of in wanted the we've supply past to in

where with inventory best our we've since happy stocks our back is that in XXXX. So, today, in seen

think that we will continue. forward, going about trend As

in will inventory We sure and bring in to to make back the early school selling can holiday. peak period hit specifically to we continue

be up So, levels the in we QX right expect to more back we QX size up inventory QX lap then saw towards start really whenever half those delays in catching of and year. I last and to significant that

we going based chain. inventory So, on in comfortable that's place to a what's we're in in plan happening would what's that that what whenever the supply matters, the bring have in end the really earlier take have receipt zoom we little the in a out, you than past and

Paul Hughes

for look just your units? driven Scott, a is at guidance versus much that of And when AUR follow-up, full-year sales, you how

Scott Lipesky

bit piece tilted of more there's kind units just of bounce it's little around. AUR say a AUR will Yes a I'd and of units. and a towards

top-line how here, AUR items prudent plans those out. to forecast to and be at as demands our inflationary we consumer laid to going we're and the the ability through as upside look pass on we've both With the in

Paul Hughes

Thanks good guys, luck.

Operator

with We'll move JJK come which Instructions] next will [Operator question, from Janet to our Kloppenburg now Research.

Janet Kloppenburg

I know that the wondering maybe, the around of for to, AUR to for sales the given as trend starting fourth coming than being you it you. positions was AUR that refer or tick Hollister, detail Good seeing does you Fran, inflationary slightly this it product you the what's I rest on wondering to AUR third, any in that versus we're and you, elevated tees, whether in what you ANF Thank competitive in was ANF? think address impact what expected second, wondering feel see gains shorts and the saw do from it said, up your like Thank I to business AUR if you and of at your think couple And year, in opportunity? pressure well or seeing expect in you I and as And morning are like as that morning. towards for the outlook A if as freight, questions. there? you Hollister? everyone. And casual but you was promotions pressure trend the expect better be quarter stronger you lastly, a Scott, remain the not quarter the I'm may your up just sectors you first environment?

Fran Horowitz

Okay, Dana.

we started. see want to Let's where get

your the address on to versus product casual. start Let's

exciting of really brands about So, categories our in what's from our both balance our is and our consumers categories brands various upon we opportunities to we're close have right depending to that saying those what customer. hearing

out that to different point, weekend back back for customer them that spend really So, always addressing if categories to to and that wanting as Abercrombie, all and lots those consumer there for that as well we that of occasions, reference start getting work. we hour point with selling we're to XX your get

we woven on and have our our well. The really an and customer pants dresses nicely. So, Hollister is tops, woven resonating all opportunity

So to have more and he to graduation. also. and they shorts events They have They maybe go prom but she, t-shirts, weekends. casual have

seeing good a having another dress we're So, business businesses in there nice support to as opportunity. both

Scott Lipesky

take other. Janet. the And Okay, I'll through

gains So, AUR at Hollister.

getting and at Hollister that than in cool of that we So, advantage quicker really point through AUR some to pushing inventory in QX and to expected the of taking carryover our down outlook. back around weather was really

We the place; and good are of quarter; chunk good So our and big a in through; a got that Gilly a finished thing. [ph] Hollister inventories riding] that's [later inventory.

As it's going to I’ll about year. to we rest it think of assuming that freight, the one for remain the where is next, go we're

knows optimistic we've think the thinking been years. relief lot that a and in of start all couple see little to of for a last but who us I are back the bit we'll half, of

The with So, closures to we into that one air usage were, the stays we will last it, freight it year. we're forced on where assume call just going benefit to Vietnam that the see we will is. lap it is heavy start

a our we that piece you the lot as QX balance. in a last inventory at saw we're hit not then freight here as us set. the And through the be tailwind competitive of into flow is, something beyond air it’s because QX say it pressure get it, will and from decision-making. is that that actually that QX. AUR I air lot What drives So freight an would looking a And in and we accounting of from hit perspective,

been a AURs up have entire We and able our promotional this to on throughout still have basis. been double-digit cycle take

We going just take in. to the offset pressure. inflationary some depth, that part forward. breath, to of the this business of AUR is being reducing some some reducing promotional promotions being remain will That up and smarter able we're with It's

Fran Horowitz

our I Our with – demand, stance important promotional based pressure to many our is think real on based customer so AUR said we've two we're pieces. customer our consumer, most times the Staying we've seeing times, our what's many and said is that right? supply, this right. on really or not inventory happening key what's are competition, the close and in-line keeping our with what

Janet Kloppenburg

product. if Hollister it and where be? that took that more want assortments of in, at late at now one I liquidated you you structured is assortment ways you you sort that of sneak impacting the could architecture you about, the that, Hollister just care that the Do deliveries to feel assortments Fran, talked of have

Fran Horowitz

Yes, are, few with well just We pleased to are mean that mentioned I as know that we tees you shorts and comfortable the minutes the yes. dress and where where is, feel swim, heading very as summer business business well. a ago, short really also into answer as I with but with

So, yes.

Janet Kloppenburg

Thanks Talk guys later. Great. much. so two

Operator

have with And next Serna UBS. we Mauricio

Mauricio Serna

portion that could taking And repeat my how make you. the the questions. I Thank maybe to progressed just were performed could the about Good if details lastly, morning, also, from for of month-to-month? I sure part part, your sales freight, two drivers you stores And quarter talking for from ask that get you remarks thanks and Great. the on it’s at AUC? you want the just when second in the but digital? correctly. versus provide about I talk mentioned to could know if you if kind wanted how you some beginning

Scott Lipesky

Sure.

the last question. Let's start with

two the drivers So, for AUC.

we more what some assumed freight into for coming we saw versus $XX million So, we incremental than QX. us That about hit thought.

accelerating sell-through. piece other was The the

As we the talked Hicks Gilly and receipt. just later about Hollister

little those those we're apparel. we fall the higher goods a heavier spring goods than with come pushed AUC that selling, So, through,

higher a AUC. comes that So

We in had in us February into back rate people in up on So of that quarter kind U.S. month March heard trends good a say school a then in of and to and our couple the here a the for hit also was perspective a I'd from of what lot margin school mini tough were we was back a and QX. going month reasons. we've out Backing year reopening last and the of market. the with shift, the had person to Easter basis, monthly March. that a consistent

at restrictions continue versus we're see last traffic thinking some we the claw back. in of is of and came getting that here about performed stores those to back benefit the up The whenever reopening We in to stores and you back yes continued Europe kind and already continue end, climb. So, have did full lot May. here we've removing April way how piece to in we their to to, trending a beginning stores talked the of of in QX U.S. those stores digital, add then least in of the see hours or there

and that balance balance coming So, we'll between to to nice digital to we continue and and see continue kind the back stores see of XX/XX track that.

Mauricio Serna

one, Germany, below I sneak recovery a EMEA, it perspective, I just last France, the if represent – with growth just from and much I seem your each And of Thank do still how expected like you about roughly but a talked maybe UK, U.S., wondering, rate. the sequential one in I mean was have given just you. could reopening, would market and higher does sales? how much And

performance to understand I could dragged So, what like in want the have just EMEA? down

Scott Lipesky

Sure.

of haven't three the the, provided are the those biggest for kind We but countries EMEA. two, each, of one, percent us for sales in

comes UK well they So, QX EMEA went perform as restrictions. results and in the of It of it heavy I pull paying significant to, some gasoline France inflation kind good in happening [ph] that and the is turned about Germany there's [indiscernible] [heating than really really because to multiples, bills] pretty mean just is throughout in to it’s we're in here the total, the seeing Ukraine, had started we pretty it likely or with what the inflation, U.S. off on the what whether U.S. Thinking customer later, consumer with local then situation more dealing the that even see quarter. of

big seeing the outlook So, We're that set region that happening the also in all inflationary in consumer but a part the it our EMEA of the reason real way. like is for that in is time, in looking up that we're U.S. seeing we've demand on

So, feel good about the big trees. three

reopening here kind are them normalcy closer to We to the to looking getting the on these even of and catching and on forward laser U.S. countries up focused

Mauricio Serna

you very much and Got it. Thank luck. good

Operator

Stanley. will Greenberger Kimberly from question next with Our come Morgan

Kimberly Greenberger

on particularly, later dig largely the have freight might wanted wanted use or from in high more much. year? little yourself to very the air Great. relief And I spot could, experience cost freight needs relief sort year, contracts some in are if inflation in you fourth Thank check any, contract the and for so I think freight in to you you Scott, some just contract bit still market? of we also you or those you mentioned then renegotiated are you of for of you are quarter. as availing in the get your I this And to if that negotiations I seeing a

to quarter to P&L gross would the Thanks we of fourth see benefits we in freight through or Assuming begin first see that so does flow would margin those some a air half the usage expect much. benefits you happen the of XXXX? lower until get into lower not

Scott Lipesky

with the freight Okay. I'll start cost.

in some actually finishing are of contracts. we midst So, up the

to there. much do added provide the of than some I'm we've happening What are in too is past to lock fluctuations try have carriers, is going we more new market. the in in contracted trying time. to some in cycle is We've which the avoid real not to spot seen rates Our we exciting. that

rates in So, will that market forward, pretty tough result and remains and is this to our goal lower flexibility we but hopefully go as there. have optionality out

of On do the through flow see benefits and freights, next yes, air year. expect QX to QX some in we

Now that the commodity other fence of on the side cost. is

markets, the starting in So, when that's cotton what's happening the about think P&L. you through to flow

in bit have because pretty So, some with those savings so of some of through does you an there since buy a of see through time little P&L to freight the costs healthy forward it them starting the there flow to commodity air will be take we into the offset a future. to lag the

really the nice freight. what we're benefit big that freight We're we thinking to going happens, that like see disruptions in not half. that's from assuming for air see about and optimistic we're last a So should year back air

Kimberly Greenberger

so Thanks Okay, great. much.

Operator

Now Marni moving [Operator Tracker. with to Shapiro Instructions] The Retail

Marni Shapiro

Hey guys.

in into Just could little first had drive the you've were two about and or traffic, what traffic it, this that I curious some just patterns helping by quick active then bit talk bit new the I'm the And driven you Are buy a in seeing store, traditional traffic guess promotions the well? as bringing when the pattern about you traffic Hollister just quarter? coming is a business. was a little customer it run you results at weather good And to store? you if the site Is like promotion more she’s specifically Could to talk ones. from the a a store? to into

Scott Lipesky

I'll first Marni. start Hey, one. the

QX. in patterns traffic So,

to some clustered are were We're normalized to there more QX breaks happening. around Easter back you know you spring get and traffic, right. So, starting

normal, year school. it's call more was abnormal what I'd with to So, last our back we say mini very

patterns year. forward closer getting definitely traffic are we we're that expecting and to rest the normalized we So, as of for the go

Fran Horowitz

bringing And new regarding consumer. to would talk which excited our how about to is customers actually we’re close in response by initial YPB, a created are request more we even our exciting by consumers, is And very YPB, it I it. was about as the about which

So, driving new customers. and traffic bringing in

of that's quickly. going. chasing quarter We almost where excited We're busy sold So, of to very SKUs goods. the out a see

So, more our Investor on Day June of at about it we'll talk XX.

Marni Shapiro

up did wasn't online number, what are I and break you that's a was I if sure you Well, highlight. sales of versus percentage for exciting nice guys out? And broke in-store? looking that

Scott Lipesky

swings. to give if have we not that you basis we'll as on normalize any there's a No, going large posted We're we to quarter-by-quarter not. keep in, but start

Marni Shapiro

much. so Thanks Fantastic.

Scott Lipesky

Great.

Fran Horowitz

Thank you.

Operator

and gentlemen, ladies questions the And that's any the all we over for time additional today. have call to back or for Fran turn closing I'll remarks.

Fran Horowitz

enjoy Day Thank weekend seeing to you in you call hope all Investor Day. I forward XX for I today. participating and you Memorial look in City New many our our of York at June

Operator

you you conference will and do now this for participation We for today. gentlemen, conclude your disconnect. and your thank may Ladies

Abercrombie & Fitch (ANF) 24 May 222022 Q1 Earnings call transcript