Abercrombie & Fitch (NYSE:ANF) was something of a retail exception on Wednesday as its stock rose sharply, up 23.5% to US$50.87 in Wednesday's trading, as its quarterly exceeded expectations and as it upgraded guidance.
The designer brand comfortably beat market forecasts with US$935.3 million in second-quarter sales, ahead of projections of US$844 million.
It reported US$56.9 million of net income, or US$1.10 per share, a notable turnaround from a loss of US$16.8 million, or 33 cents a share, in the same period last year.
At US$1.10 earnings per share was miles ahead of the 17 cents forecast amongst analysts.
Fran Horowitz, Abercrombie chief executive, claimed “strong customer receptivity” across the company’s brands for the stronger than expected performance, particularly amongst Abercrombie’s namesake stores.
The Abercrombie brand saw sales up 23%, whilst Hollister improved by 5%.
“These strong results showcase the power of our playbook and our team’s ability to align product, voice, and experience to meet our customers’ needs,” Horowitz said in a statement.
“Operationally, we are strategically managing inventory, leveraging chase capabilities to support demand, and driving efficiency across our business.”
With an upgraded outlook, Abercrombie anticipates a 10% rise in net sales improving from its previous forecast of 2% to 4%, while operating margins are now expected between 8% and 9%, up from 5% to 6%.
Horowitz added: “While the macro environment remains dynamic, our first-half results give us confidence to stay on offense for the second half.
“Consistent with our Always Forward Plan, we are continuing to open stores and make critical long-term investments in digital and technology that will keep our brands in position to exceed our customers’ expectations.”
In New York, Abercrombie stock was up US$9.70 or 23.5% trading at US$50.87 in Wednesday's dealing.