Abercrombie & Fitch Co. (NYSE:ANF) Q1 2018 Earnings Conference Call Transcript

Jun 01, 2018 • 08:30 am ET

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Abercrombie & Fitch Co. (NYSE:ANF) Q1 2018 Earnings Conference Call Transcript

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Presentation
Executive
Fran Horowitz

industry trends. In addition to stronger traffic, we've seen further improvement in brand health related metrics of both brands, including external metrics, such as YouGov BrandIndex, and our own internal voice of the customer and customer satisfaction scores.

We continue to make progress on our loyalty programs, growing member accounts approximately 17 million across brands. Our loyalty club members continue to spend more and more often. These programs are providing valuable data and insights that enable us to direct special attention to our most valuable customers, and explore how to harness their engagement with exclusive products and experiences.

Now turning to the brand's performance. We continue to focus our execution on aligning product, voice and experience, which we believe drive traffic and conversion. Customer centricity remains core to our success. Our team continue to spend countless hours with our customers in our stores, and events to listen and learn about their preferences.

At Hollister, we had another quarter of strong growth with comp sales of 6% driven by continued strength in North America and Asia. We saw strength across genders with record first quarter sales for guide. From assortment architecture perspective, we've said previously, we devote our attention to our must win and must grow categories. This is a strategic focus as must win are the core categories that drive our business and that we're known for, such as graphic tees, outerwear and jeans. And must grow are those categories adjacent and complimentary to must win, such as swim, underwear and Gilly Hicks, where we believe we're able to drive significant growth and take share. These categories accounted for more than two-thirds of Hollister sales with growth, driven by record first quarter sales in denim and swim, and another strong quarter in graphic tees and outerwear.

We saw strong response to newness and positioned ourselves to chase effectively during the quarter, with the triggering of more than 20% in second quarter receipts based on first quarter learning. We've also seen a continued enthusiastic response to Gilly Hicks. We've invested behind our Gilly Hicks brands, dedicating more space to it, and we are pleased with the results. We see it drawing a new customers and adding incremental sales to the Hollister brand. We continue to explore Gilly's potential and see further opportunities for growth.

We believe Hollister's marketing is industry-leading, and our marketing campaign execution this year is the best it has ever been. We are seeing high levels of engagement across platforms and programs. Carpe Now is our most successful campaigns to date, with more than 1.5 billion impressions across all platforms, and more than 78 million engagements with our content in the first quarter.

At Abercrombie, we saw our second consecutive quarter of positive comp with comp sales of 3%, including strength in our stabilizing North America base, driven by traffic and conversion across channels. From an international sales perspective, we had strong performance in Asia, while Europe experienced a tougher quarter due in part to a late spring