(Reuters) – Abercrombie & Fitch shares surged 25% in premarket trading on Wednesday after it posted better-than-expected first-quarter results and forecast strong annual sales as the apparel retailer’s move to introduce fresh styles such as printed jeans and dresses helped draw more shoppers.
Shares of the company, which has been rattled by U.S. President Donald Trump’s erratic tariff policy moves, have lost nearly half of their value so far this year.
The company’s Hollister brand with vintage tees and denim collections has been resonating more with customers, especially younger shoppers, who are on a hunt for trendy apparel and accessories.
Hollister brand’s comparable sales jumped 23% in the reported quarter, from a 13% rise seen a year ago.
However, Abercrombie joined several retailers including upscale apparel brand Ralph Lauren in cutting its annual profit forecast amid expectation of uneven demand due to tariffs.
The company now expects annual net income per share in the range of $9.50 to $10.50, compared with prior forecast of $10.40 to $11.40 per share.
The company expects annual net sales to grow between 3% and 6%, compared with prior forecast of a 3% to 5% growth.
Abercrombie said that its forecast accounted for existing tariffs that includes a 30% levy on imports from China and a 10% tariff on all other global imports.
Net of planned mitigation efforts, the full-year outlook assumes about $50 million of tariff expense, or 100 basis points as a percentage of net sales, the company added.
According to the company’s annual filing, Abercrombie estimates about 5% of total merchandise receipts were directly imported to the United States from China in fiscal 2024.
Overall, Abercrombie posted quarterly net sales of $1.10 billion for the quarter ended May 3, compared with analysts’ estimate of $1.07 billion, as per data compiled by LSEG.
Its quarterly adjusted profit was $1.59 per share that beat analysts’ estimate of $1.39 per share.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shailesh Kuber)
