By Angela Christy M
Aug 26 (Reuters) – Abercrombie & Fitch raised its full-year sales and profit forecasts on Wednesday as resilient demand for its apparel brands, led by its namesake Abercrombie label, lifted the retailer’s shares more than 22% in early trading.
The New Albany, Ohio-based company entered the crucial back-to-school shopping season with momentum at Hollister, its teen-focused brand, which has historically benefited from seasonal spending.
That back-to-school momentum at Hollister continued to build as the company exited the second quarter, Chief Executive Fran Horowitz said on a post-earnings conference call.
The company now expects full-year net sales to grow 5%, compared with its earlier forecast of 3% to 5%.
Abercrombie & Fitch faces stiff competition from rivals including American Eagle Outfitters, Gap, Urban Outfitters and Zara, which compete for a similar customer base of young, fashion-conscious shoppers.
ABERCROMBIE BRAND DRIVES MOMENTUM
The namesake Abercrombie brand drove most of the growth for the company, helped by stronger spending from core customers and a strong assortment, GlobalData managing director Neil Saunders said.
Sales beat expectations on improving Abercrombie trends and easing EMEA pressure at Hollister, Telsey Advisory Group analyst Dana Telsey said.
The retailer also raised its annual earnings per share forecast to $13.10 to $13.60, from $10.20 to $11.00 per share, after receiving tariff refunds under the International Emergency Economic Powers Act for the fiscal year.
The company, whose shares have declined more than 10% so far this year, reported quarterly earnings per share of $4.17, beating analysts’ estimate of $1.99 per share.
Quarterly revenue came in at $1.27 billion, slightly above analysts’ expectation of $1.25 billion, according to data compiled by LSEG.
Same-store sales in the Americas, its biggest market that accounts for more than half its revenue, rose 1% in the quarter, while EMEA same-store sales fell 4%.
(Reporting by Angela Christy in Bengaluru; Editing by Tasim Zahid and Pooja Desai)
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