Abercrombie Lifts Outlook as 2Q Profit, Sales Rise

Dow Jones
1 hour ago
 

Abercrombie & Fitch raised its outlook for the year after logging higher second-quarter profit and sales, driven by improving demand across multiple geographies.

The clothing company on Wednesday posted a profit of $183.7 million for its quarter ended Aug. 1, up from $141.4 million in last year's comparable period. Quarterly adjusted earnings of $4.17 a share, were well ahead of the $1.99 a share that analysts polled by FactSet had expected.

The recent quarter included a roughly $100 million benefit stemming from tariff refunds, the company noted.

Sales climbed 4.8% to $1.27 billion, just ahead of Wall Street models for $1.25 billion.

Comparable sales--which account for store openings and closings--were flat across the company, reflecting a 4% increase at its namesake brand, offset by a 3% decline across its Hollister brand. Analysts had expected same-store sales to tick up 0.8%.

Chief Executive Fran Horowitz said growth has been balanced across the company's brands and regions, highlighted by accelerating momentum in the Americas and improving trends across Europe, the Middle East and Africa.

"After a strong start to the year, we are updating our full-year sales and operating margin outlook and remain confident in our long-term growth path and investment priorities," she said.

For the current quarter, Abercrombie guided for adjusted earnings of $2.90 to $3.20 a share and for sales to grow 5% to 6%. Analysts are looking for adjusted earnings of $2.82 a share and for sales of $1.35 billion, up 4.3% from last year.

For the year, the company now expects adjusted earnings of $13.10 to $13.60 a share, up from a prior outlook of $10.20 to $11 a share. Net sales are now projected to increase around 5%, compared with a prior forecast of growth in the range of 3% to 5%.

Analysts are looking for adjusted earnings of $10.72 a share on sales of $5.45 billion, marking a 3.5% increase from last year.

Shares jumped 13%, to $123.03, in premarket trading.

 
 

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