Abercrombie & Fitch shares jump on earnings beat as it posts 14th quarter of sales growth

Abercrombie & Fitch (NYSE:ANF) shares roseate astir 12% aft the institution reported first-quarter results that bushed nett expectations, portion gross somewhat missed and comparable income declined.

For the 4th ended May 2, the institution posted adjusted net of $1.47 per share, supra expert expectations of $1.28.

Net income roseate 2% twelvemonth implicit twelvemonth to $1.11 billion, narrowly missing statement estimates of $1.12 billion.

Comparable income fell 1%, compared with expectations for level performance.

The company’s 14th consecutive 4th of gross maturation was driven by a 3% summation successful the Americas and a 24% leap successful APAC, portion EMEA declined 10%.

Abercrombie marque income roseate 3%, portion Hollister was flat.

Looking ahead, the institution maintained its full-year outlook, expecting nett income maturation of 3% to 5% and nett income per diluted stock of $10.20 to $11. It besides reiterated plans for astir $450 cardinal successful stock repurchases for the year.

For the 2nd quarter, Abercrombie & Fitch forecast nett income maturation of 2% to 4% and net per stock of $1.80 to $2, alongside astatine slightest $150 cardinal successful buybacks.

“With our lawsuit astatine the halfway of everything we bash and a beardown instauration successful place, we stay connected discourtesy crossed merchandise and selling and are assured successful our way to present full-year nett income maturation crossed brands, double-digit operating margins, beardown currency travel and net per stock maturation to make semipermanent worth for shareholders,” Abercrombie CEO Fran Horowitz said successful a statement.

Jefferies analysts wrote that the full institution results came successful amended than feared, with comparable income show somewhat up of expectations and Abercrombie-branded comps notably much resilient than anticipated, coming successful level versus expectations for a decline. The steadfast believes that this suggests underlying marque spot is holding up amended than the Street had modeled, adjacent arsenic wide comps remained negative.

On determination performance, Jefferies highlighted continued spot successful the Americas and APAC offset by a sharper downturn successful EMEA, which it attributed to a tougher geopolitical and request backdrop. It flagged EMEA arsenic a cardinal ongoing unit constituent for the maturation mix.

On margins, Jefferies noted that some operating borderline and EPS exceeded the company’s anterior outlook, contempt softer gross and concerns astir promotions.

The steadfast said the effect points to continued subject connected costs and a favorable marque premix effect supporting profitability.