Abercrombie raises full-year forecasts on robust apparel demand, shares jump

By Angela Christy M

Aug ‌26 (Reuters) - Abercrombie & Fitch ​raised ​its full-year sales and profit forecasts on Wednesday as resilient demand for its apparel brands, led by its namesake Abercrombie ‌label, lifted the retailer's shares more than 22% in early ⁠trading.

The New Albany, Ohio-based company entered the crucial back-to-school shopping season with momentum at ‌Hollister, its teen-focused brand, which ‌has historically benefited from seasonal spending.

That back-to-school momentum at Hollister continued to build as the company exited the second quarter, Chief Executive ​Fran Horowitz said on a post-earnings conference call.

The company now expects full-year net sales to grow 5%, compared with its earlier forecast ⁠of 3% to 5%.

Abercrombie & Fitch faces stiff competition from rivals including American Eagle Outfitters, Gap, Urban Outfitters ​and Zara, which compete for a similar customer base of young, fashion-conscious shoppers.

ABERCROMBIE BRAND DRIVES MOMENTUM

The namesake Abercrombie brand ​drove most of the growth for ‌the company, helped by stronger spending from core customers and a strong assortment, GlobalData managing director Neil Saunders said.

Sales ⁠beat expectations on improving Abercrombie trends and easing EMEA pressure at Hollister, Telsey Advisory Group analyst Dana Telsey said.

The retailer also raised its annual earnings per ⁠share forecast to $13.10 to $13.60, from $10.20 to $11.00 per share, after receiving tariff refunds under the ​International Emergency Economic Powers Act for the fiscal year.

The company, whose shares have declined more than 10% so far this year, reported quarterly earnings per share of $4.17, ‌beating analysts' estimate of $1.99 per share.

Quarterly revenue came in at $1.27 billion, slightly above analysts' expectation of $1.25 billion, according ‌to data compiled by LSEG.

Same-store sales in the Americas, its biggest market that ⁠accounts for more than half ‌its revenue, rose 1% ​in the quarter, while EMEA same-store sales fell 4%.

(Reporting by Angela Christy in Bengaluru; Editing by Tasim Zahid and ‌Pooja Desai)

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