Abercrombie & Fitch posted quarterly same-store gross sales progress after greater than a yr of declines and forecast sturdy gross sales for the vacation quarter, as its California-themed surfwear model Hollister helped revive the retailer.
Shares of the corporate, which additionally beat its third-quarter internet gross sales and revenue estimates, jumped 25 % to $15.09 in premarket buying and selling on Friday. The inventory has misplaced practically 1 / 4 of its worth previously 12 months.
Abercrombie and different teen retailers have struggled amid practically 4 years of declining gross sales, as prospects shopped at fast-fashion chains and on-line.
In response, Abercrombie shed its risqué promoting, and refreshed its line of logo-emblazoned, high-priced fundamentals to incorporate trendier denim and floral prints in its line of clothes.
“We’re happy by the clear progress throughout all manufacturers, delivering one other quarter of sequential comparable gross sales enchancment, and a return to constructive comparable gross sales,” Chief Government Fran Horowitz mentioned.
Similar-store gross sales of Hollister, the important thing income contributor in latest quarters, rose eight %. Analysts on common had anticipated a 2.9 % rise, in accordance with Thomson Reuters I/B/E/S.
“The Hollister enhancements, strides at A&F, and nonetheless stable stability sheet recommend an extended tail to the ANF story,” RBC Capital Markets analyst Brian Tunick wrote in a shopper notice.
Internet income rose practically 5 % to $859.11 million, beating analysts’ common estimate of $818.9 million, in accordance with Thomson Reuters I/B/E/S.
Abercrombie, which deserted talks on a sale of its enterprise in July after failing to discover a purchaser who would meet the board’s valuation, mentioned total same-store gross sales rose four %, beating analysts’ common estimate of a zero.three % rise.
Excluding objects, the corporate earned 30 cents per share, beating estimates of 22 cents.
The corporate forecast share progress of fourth-quarter comparable gross sales within the low-single digits and for internet gross sales within the mid-to-high-single digits.
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