Abercrombie & Fitch (NYSE:ANF) shares popped after the clothing retailer posted record first quarter sales of $1.1 billion, led by growth in its Hollister brand.
First quarter sales were up 8% from the year-ago quarter, as Hollister sales jumped 22% to approximately $549 million.
Abercrombie brand sales declined 4% compared to a 31% growth in the same quarter last year.
Earnings per share (EPS) of $1.59 beat Wall Street estimates of $1.33.
Despite its strong quarterly performance, Abercrombie & Fitch lowered its full-year profit outlook due to an expected $50 million negative impact from tariffs, assuming the current policies of a 30% tariff on imports from China and a 10% tariff on all other imports remain in effect.
The company now expects full-year EPS to be between $9.50 and $10.10, down from the previous forecast of $10.40 to $11.40, though still slightly above the analyst consensus of $10.33.
The company raised its revenue growth guidance to 3% to 6% from its earlier forecast of 3% to 5%, but tempered margin guidance to a range of 12.5% to 13.5% from its earlier guidance of 14% to 15%.
Analysts at Jefferies welcomed Abercrombie & Fitch’s better-than-expected results, maintaining their ‘Buy’ rating and $135 price target. “We continue to recommend buying shares,” the analysts wrote.
The stock traded up 22.3% at about $94 on Wednesday morning.