Advan does not observe traffic* for the brands because of the limitation of our method for locations inside indoor malls and “urban canyons” like 5th Avenue. This is significant for ANF given that the “non-observable footprint” for brand Abercrombie’s footprint is 45% and for Hollister, 59% per our Claude.ai+Advan analysis.
- For the observable footprint (US-only), observed comp-traffic for brand Abercrombie was +2.9% (this is excluding abercrombie kids), and Hollister, +1.1% per our Claude.ai+Advan analysis. However, both figures are less than the shopping centers in which they sit, with Abercrombie’s centers +5% and Hollister’s +2%.
- Reported brand Abercrombie worldwide comp-sales (+4%) were above consensus (+1.4%). Positive AUR, UPT, and conversion rate improvement contributed to Abercrombie’s Americas comp-sales increase.
- Observed spend (per Advan and which includes .com) at Abercrombie was +400bps stronger QoQ, whereas Hollister was -100bps less. Reported Americas segment revenue was +200bps stronger QoQ.
- Reported Hollister worldwide comp-sales (-3%) were below consensus (-0.3%). An improvement in conversion rate also contributed to Hollister’s comp-sales. As such, we suspect that the shortfall at Hollister was weaker traffic at non-observable locations (the 59%) and particularly at .com (per our observed spend data).
- The CFO shared that both brands grew revenue in the Americas, however, Hollister revenue growth was flattered by wholesale sell-in to Target, adding 2-3 ppts to brand growth and 1 ppt to regional growth (our est).
- Per Hollister in the US, CEO Fran Horowitz said, “Hollister's back-to-school season continued to build as we exited the second quarter, and we've seen growth accelerate off of Q2 levels so far in August.”
- FQ3-QTD observed comp-traffic for brand Abercrombie was +7% and Hollister, +3%, per our Claude.ai+Advan analysis, thus supporting Horowitz’s statement. (Again, we are missing the brands’ power locations in indoor malls and urban canyons.)
* Sell-side reports cited traffic of -4% for Abercrombie and +13% for Hollister for the quarter, figures that don’t align with reported results.
