Abercrombie & Fitch, the popular retailer known for its Abercrombie and Hollister brands, has experienced a surge in its stock as it raises its sales outlook and delivers strong second-quarter earnings. Contributing factors to their success include higher product prices and lower freight costs.
For the period ending on July 29, Abercrombie & Fitch reported adjusted earnings per share of $1.10, with sales reaching $935 million. This exceeded analysts’ expectations, who anticipated earnings of 17 cents on $844 million in sales.
CEO Fran Horowitz attributed the positive performance to lower freight costs and higher average unit retail. In simpler terms, each item sold at a higher price compared to the previous period.
In response to the impressive quarter, shares of Abercrombie & Fitch (ANF) rose nearly 16% to $47.45 in premarket trading on Wednesday.
Not only did Abercrombie & Fitch exceed expectations for the second quarter, but they also raised their outlook for full-year sales growth. The retailer now expects sales to grow around 10% in fiscal 2023, reaching approximately $4.07 billion. This is a significant increase from their previous projection of 2-4% growth. Industry analysts had anticipated only 4% growth.
Overall, Abercrombie & Fitch’s second-quarter performance showcases their ability to adapt and thrive in the current market conditions. Their focus on raising prices and managing costs has proven successful, leading to increased investor confidence.