Abercrombie & Fitch (NYSE:ANF) shares surged 28% after the clothing retailer reported strong results for the third quarter, surpassing Wall Street expectations on both earnings and revenue.
Adjusted earnings per share (EPS) were $2.36, topping estimates of $2.16.
Revenue increased 6.8% year-over-year to $1.29 billion, slightly ahead of estimates of $1.28 billion.
The results marked the company’s 12th consecutive quarter of growth, with record net sales and a 3% increase in comparable sales. Growth was led by the Americas and EMEA regions, each up 7%, while the APAC region saw a 6% decline.
Brand performance was mixed, with Hollister sales rising 16% and Abercrombie brands falling 2%.
“We achieved three years of consecutive quarterly sales growth, delivering record third quarter net sales, with 7% growth to last year,” Abercrombie CEO Fran Horowitz said in a statement.
“We remain on track toward record net sales for fiscal 2025, on the foundation of consistent quarterly top-line growth, top-tier profitability, and healthy cash flow.”
For the full fiscal year, the company narrowed its sales outlook, now expecting net sales growth of 6% to 7% and net income per diluted share in the range of $10.20 to $10.50.
Operating margins are projected between 13% and 13.5%, with capital expenditures of around $225 million and approximately 40 net store openings planned.
Looking ahead to the fourth quarter, Abercrombie anticipates net sales growth of 4% to 6%, operating margins around 14%, and EPS of $3.40 to $3.70. The company also expects to repurchase about $100 million of shares
During Q3, Abercrombie & Fitch repurchased $100 million in shares during the quarter, bringing year-to-date buybacks to $350 million.
Jefferies analysts awarded the stock a ‘Buy’ rating and $100 price target post-earnings, above current levels of about $84.They noted Hollister’s strong performance during Q3 and that the Abercrombie brand was negative but improving.
“Looking ahead, we believe Abercrombie has some of the easiest compares in the mall into 2026, positioning the company well from a growth and margin perspective ahead, while valuation is undemanding, in our view,” they wrote.