An Abercrombie & Fitch store in San Francisco.
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Shares of Abercrombie & Fitch soared in premarket trading, after the retailer crushed Wall Street’s earnings and sales expectations for the quarter and raised its forecast for the year.
Here’s how the retailer did in the fiscal second quarter ended July 29 compared with what Wall Street expected, based on a survey of analysts by Refinitiv:
- Earnings per share: $1.10 vs. 17 cents expected
- Revenue: $935.3 million vs $842.4 million expected
Net income for the three-month period rose to $56.9 million, or $1.10 per share, from a loss of $16.8 million, or 33 cents a share, in the year-ago period.
Net sales rose from $805.1 million in the year prior.
Abercrombie said it now anticipates net sales will rise by about 10% for the full fiscal year, up from $3.7 billion in the prior year. It had previously expected growth of between 2% and 4%.
It said it expects operating margins to improve, too, as costs of freight and raw materials fall. It anticipates operating margins to be in the range of 8% to 9%, compared with prior expectations of 5% to 6%.
The retailer’s sales and its stock price have shot up, as Abercrombie has reinvented its image from a mall store known for shirtless models and a strong scent of cologne to a retailer that resonates with a broader audience.
As of Tuesday’s close, shares of Abercrombie had shot up about 80% this year, far outpacing the approximately 14% gains of the S&P 500. Shares of the company touched a 52-week high of $43.47 earlier this week.
Abercrombie also has stood out because it’s defied industry-wide trends. Retailers including Home Depot, Target and Walmart have all spoken about consumers who aren’t spending as freely on discretionary items, such as clothing. Foot Locker echoed similar sentiments, as its sales plummeted and it cut full-year guidance on Wednesday.
This is a developing story. Please check back for updates.
