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Abercrombie shoots up on stronger Q3 revenue

Rebounding sales at the Hollister unit helped the retailer beat the Wall Street consensus.

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Abercrombie’s turnaround strategy is starting to gain traction.

Abercrombie & Fitch (NYSE:ANF) soared on Friday after the retailer reported a higher-than-expected third-quarter revenue, buoyed by rebounding sales at its Hollister unit.

Shares gained 26.6% to $24.67 at 1:35 p.m. in New York.

Revenue fell 3.6% to $878.6mln in the 13 weeks ended on October 31, the New Albany, Ohio-based company said in a statement on Friday.

That topped analysts’ $862.8mln average projection, according to Capital IQ.

Abercrombie’s turnaround strategy is starting to gain traction, especially at its younger, Southern California-inspired Hollister brand.

During the third quarter, Hollister's same-store sales increased 3 percent, marking its first period of comparable sales growth in nearly four years.

Net income attributable to Abercrombie more than doubled to $41.9mln.

"As we look ahead in the fourth quarter, there are mixed signals in the sector and we remain cautious," Abercrombie Executive Chairman Arthur Martinez said.

However, the company said it still expects comparable sales to be flat in the holiday quarter.

Quick facts: Abercrombie & Fitch

Price: 16.9 USD

NYSE:ANF
Market: NYSE
Market Cap: $1.06 billion
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