Abercrombie & Fitch (NYSE:ANF) raised its full-year sales forecast after beating estimates for the second quarter driven by steady demand for its flagship brands.
However, shares of the company plunged almost 16% amid high investor expectations following a run-up in the stock.
The retailer now expects its full-year sales to grow between 12% and 13% from $4.3 billion in fiscal 2023, up from its earlier expectation of 10% growth. Analysts forecast 11.3% growth to $4.77 billion.
For the second quarter, revenue increased 21% year-over-year to $1.1 billion, ahead of estimates of $1.09 billion.
Sales in its Abercrombie brand surged 26% in the three months ending August 3, while Hollister saw growth of 17%.
Adjusted earnings per share of $2.50 were a significant improvement from $1.10 in the year-ago quarter and topped forecasts of $2.22.
“Our team continued to execute at a very high level in the second quarter, resulting in better-than-expected sales growth and profitability,” Abercrombie CEO Fran Horowitz commented.
“The strength of our brand portfolio and improvements we’ve made in global capabilities resulted in broad-based growth across regions, brands and channels.”
Shares of Abercrombie traded down 15.9% at $140 in early trade on Wednesday.