Financial Data and Key Metrics Changes - Total net sales for Q3 2021 were 79 million, compared to 27 million in 2019, representing the best third quarter operating income since 2012 [29] - Net income per diluted share on an adjusted non-GAAP basis was 0.76 last year [30] Business Line Data and Key Metrics Changes - Hollister sales, including Gilly Hicks and Social Tourist, rose 10% year-over-year and 1% compared to Q3 2019 [25] - Abercrombie sales, including Kids, increased 12% year-over-year and 10% compared to Q3 2019, representing the highest sales volume since 2015 [18][25] - Digital sales grew 8% year-over-year and 55% compared to 2019, accounting for 46% of total sales [24][8] Market Data and Key Metrics Changes - U.S. sales increased 17% year-over-year and 12% compared to 2019, outperforming other markets [7][26] - EMEA sales were down 6% year-over-year and 7% compared to Q3 2019, with the U.K. showing sequential sales improvements [26] - APAC sales decreased 12% year-over-year and 32% compared to 2019, impacted by ongoing COVID cases and geopolitical issues [27] Company Strategy and Development Direction - The company is focused on digital and omni-channel enhancements, with a commitment to customer engagement and product quality [6][10] - Strategic investments in marketing, technology, and fulfillment are aimed at driving business growth [6] - The company plans to continue optimizing its store fleet and enhancing its digital presence, including same-day delivery options [13][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver an operating margin between 9% and 10% for the fiscal year, the best since 2008 [22][30] - The company anticipates ongoing AUR (Average Unit Retail) opportunities and plans to leverage insights from customer engagement to drive future growth [9][12] - Management acknowledged supply chain challenges but highlighted the team's efforts to navigate these issues effectively [22][28] Other Important Information - The company repurchased approximately 2.7 million shares for 500 million approved by the Board [30] - The company opened 5 new stores and closed 3, maintaining a flat store count year-to-date [30] Q&A Session Summary Question: What are the AUR assumptions for Q4 and how do they compare to Q3? - Management indicated that Q4 will see accelerated pressure on gross margin due to higher unit flows and Vietnam reopening impacts, but they expect AUR improvements to offset some of the freight cost pressures [36] Question: Can you provide an update on denim sales? - Management reported that denim sales are at an all-time high, with expectations for continued strength in the category due to consumer demand for new styles [42] Question: What are the long-term EBIT margin goals? - Management expressed confidence in sustainable margin gains due to a fundamental shift in the operating model and digital acceleration [47][48] Question: What are the expectations for international business in Q4? - Management expects strong performance in the U.S. to continue, with the U.K. showing positive trends, while acknowledging challenges in other international markets [50][51] Question: How is the company managing occupancy expenses? - Management noted progress in reducing occupancy costs and plans to continue repositioning the store fleet to maintain profitability [54] Question: What is the status of price increases and promotional strategies? - Management confirmed that they have not raised prices this year and have focused on reducing promotions, leading to AUR growth [56]
A&F(ANF) - 2021 Q3 - Earnings Call Transcript