Abercrombie & Fitch Co. (NYSE:ANF) shares jumped more than 11% in premarket trading after the apparel retailer delivered second-quarter earnings and revenue above Wall Street forecasts and raised its full-year guidance.
Adjusted earnings reached $4.17 per share, exceeding the analyst consensus of $1.98 by $2.19. Revenue increased 5% year-over-year to $1.3 billion, ahead of expectations of $1.25 billion.
The quarterly figures included approximately $100 million in pre-tax IEEPA tariff refunds, which contributed $1.75 per diluted share. Operating margin reached 20%, significantly above the company’s previous forecast of approximately 10%.
Sales increase across all major regions
Abercrombie & Fitch recorded net sales growth across each of its geographic markets during the second quarter.
Sales in the Americas increased 5%, while APAC delivered the strongest regional growth with a 19% increase. EMEA sales advanced 2%.
Both of the group’s main brands generated record second-quarter sales. Abercrombie brands increased sales by 8%, while Hollister recorded growth of 2%. Comparable sales across the company were flat.
“We delivered record second quarter net sales and our 15th consecutive quarter of growth, reflecting our teams’ continued focus on serving customers with compelling product, marketing, and experiences,” said CEO Fran Horowitz.
Third-quarter earnings forecast exceeds expectations
Abercrombie & Fitch expects third-quarter earnings of between $2.90 and $3.20 per share.
The midpoint of $3.05 is above the current analyst consensus estimate of $2.85.
Net sales are expected to increase between 5% and 6% during the quarter, indicating that management expects the retailer’s growth momentum to continue into the second half of the year.
Abercrombie & Fitch raises full-year guidance
Following the stronger-than-expected second quarter, Abercrombie & Fitch substantially increased its full-year earnings forecast.
The company now expects earnings per share of between $13.10 and $13.60, compared with its previous guidance range of $10.20 to $11.00. The midpoint of the new range, $13.35, is well above the analyst consensus estimate of $10.73.
Full-year net sales are now expected to increase by approximately 5%, compared with the previous forecast for growth of between 3% and 5%.
Operating margin is projected at between 14.5% and 15.0%, including approximately 220 basis points of benefit from IEEPA tariff refunds.
The combination of record second-quarter sales, stronger-than-expected profitability and a sizeable increase in annual earnings guidance helped drive the sharp positive reaction in Abercrombie & Fitch shares.
Abercrombie and Fitch stock price
