Abercrombie & Fitch Co. shares jumped over 11% in premarket trading on Wednesday after the retailer reported adjusted second-quarter earnings that significantly exceeded expectations and raised its full-year guidance.
The New York-based company posted adjusted earnings per share of $4.17 for the three months ended July 26, well above the $1.98 consensus estimate from analysts polled by Refinitiv. Revenue totaled $1.3 billion, up 5% from a year earlier and surpassing the $1.25 billion estimate. The results marked the 15th consecutive quarter of growth for the company.
The beat was driven in part by approximately $100 million in pre-tax IEEPA tariff refunds, which contributed $1.75 per diluted share. Operating margin came in at 20%, far exceeding the prior outlook of around 10%. Comparable sales remained flat for the quarter.
Regionally, net sales growth was strongest in Asia-Pacific at 19%, followed by 5% in the Americas and 2% in Europe, the Middle East and Africa. By brand, Abercrombie brands sales rose 8% to a record second-quarter level, while Hollister sales increased 2%, also reaching a record.
For the current quarter, Abercrombie forecast adjusted EPS of $2.90 to $3.20, with a midpoint of $3.05, above the $2.85 consensus. Net sales growth is projected at 5% to 6%.
The company raised its full-year outlook, now expecting adjusted EPS of $13.10 to $13.60, up from the prior range of $10.20 to $11.00. The midpoint of $13.35 exceeds the $10.73 consensus. Full-year net sales growth is projected at around 5%, compared with the prior 3% to 5% range. Operating margin is now expected to reach 14.5% to 15.0%, including about 220 basis points of benefit from IEEPA tariff refunds.
CEO Fran Horowitz said the company delivered record second-quarter net sales and its 15th straight quarter of growth, attributing the performance to a focus on product, marketing and customer experience.
