(Bloomberg) — Abercrombie & Fitch Co. shares rose after the retailer beat first-quarter gross sales estimates, extending its restoration from the graveyard of juvenile trend.
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The inventory rose 24% on Wednesday, posting its greatest acquire since Could 2023. Abercrombie shares have been already buying and selling at an all-time excessive and have now greater than doubled this yr.
Income rose for the sixth consecutive quarter to $1 billion, and income improved due to fewer promotions and settlement offers. Similar-store gross sales for Abercrombie's eponymous model rose 29% within the interval, in contrast with a 17% development estimate from two analysts surveyed by Bloomberg. Hollister's comparable retailer gross sales rose 13%, beating an estimate of eight%.
Chief Govt Fran Horowitz stated Abercrombie used to routinely depend on reductions of 30% to 50% to draw consumers. “Right now it makes the shopper 15 or 20% joyful,” she stated in a Bloomberg Tv interview.
The corporate continues to cater to the quickly altering tastes of Technology Z and millennial shoppers, with expanded choices starting from wedding ceremony fits to workplace put on. Girls's clothes and new tendencies in denim, together with vast legs and saggy, low-rise denims, helped enhance gross sales, Horowitz stated on the earnings name. At Hollister, the corporate's teen-oriented model, the lads's division grew once more.
The New Albany, Ohio-based retailer now expects internet gross sales to extend about 10% for the yr, up from a earlier estimate of four% to six%.
Opponents haven't been so fortunate: VF Corp., proprietor of Vans and Timberland, final week reported a seventh straight quarter of declining gross sales, with losses at each main model.
William Blair analyst Dylan Carden stated it's exhausting to imagine in Abercrombie's inventory rally proper now when it's unclear how for much longer the corporate will have the ability to preserve this tempo of development. He charges shares as equal to a holding.
“We imagine the most important danger is solely the visibility of how lengthy the corporate can preserve its present momentum,” Carden stated in a analysis notice.
(Updates actions in second paragraph, provides CEO remark in fourth.)
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