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Abercrombie & Fitch’s second-quarter online sales surged 56%.

Abercrombie & Fitch's second-quarter online sales surged 56%.
  • The apparel retailer  reported a surprise profit, as it cut costs amid the e-commerce boom.
  • Abercrombie called out a slower start to the back-to-school season due to the coronavirus pandemic.
  • But CEO Fran Horowitz said back-to-school sales will likely drag all the way into October

Even though overall sales were down, investors were encouraged to see that Abercrombie managed to keep its costs down, amid such rapid online growth, boosting its profitability.

Typically, when a retailer’s online sales rise and store sales shrink, that comes with added expenses such as packing and shipping that weigh on margins.

But Abercrombie seems to have it all figured out — at least in the latest quarter.

The company said shoppers flocked to its brand’s websites, which include Hollister, to stock up on sweatpants, pajama sets and other cozy clothes to wear at home. “.

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During the pandemic, the retailer has been cutting costs in stores, including by adjusting employees’ hours, he explained, to fuel its e-commerce business.

“We thought it would take a little bit longer to get here,” he added, but the pandemic has accelerated these adjustments.

Its store and distribution expenses were down almost 18%, while marketing costs were down 16%.

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