A Abercrombie & Fitch store is seen on April 09, 2025 in New York City.
Michael M. Santiago | Getty Images
Shares of Abercrombie & Fitch soared on Wednesday, even after the retailer slashed its profit outlook due to tariffs, which are expected to hit its business by $50 million.
The company is now expecting full year earnings per share to be between $9.50 and $10.50, down from a previous range of between $10.40 and $11.40. Analysts were expecting earnings of $10.33 a share, according to LSEG.
In addition, Abercrombie raised the top end of its 2025 revenue outlook, as it now anticipates net sales growth of 3% to 6%, up from a previous estimate of a 3% to 5% increase.
Abercrombie also cut its operating margin forecast, another closely watched metric by investors. It’s now expecting its operating margin to be between 12.5% and 13.5%, down from a previous range of between 14% to 15%.
Still, shares of Abercrombie soared 25% in premarket trading after the company issued first-quarter results that beat Wall Street’s expectations on the top and bottom lines. The stock had fallen nearly 49% this year entering Wednesday.
Here’s how the apparel company performed in the first quarter compared with expectations, based on a survey of analysts by LSEG:
- Earnings per share: $1.59 vs. $1.39 expected
- Revenue: $1.10 billion vs. $1.07 billion expected
The company’s reported net income for the three-month period that ended May 3 was $80.4 million, or $1.59 per share, compared with $114 million, or $2.14 per share, a year earlier.
Sales rose to $1.10 billion, up about 8% from $1.02 billion a year earlier. In a news release, Abercrombie said sales reached a record high for the fiscal first quarter.
“This was above our expectations and was supported by broad-based growth across our three regions,” CEO Fran Horowitz said in a statement. “Hollister brands led the performance with growth of 22%, achieving its best ever first quarter net sales, while Abercrombie brands net sales were down 4% against 31% sales growth in 2024.”