**Abercrombie & Fitch’s stock soared on Wednesday after the struggling U.S. clothing retailer posted a smaller-than-expected loss and raised its annual profit outlook, a sign that its turnaround efforts are starting to show results.**
The company’s shares jumped more than 18% in premarket trading after the earnings report, which showed that Abercrombie narrowed its net loss to $23.9 million in the three months ended Jan. 31, compared with a loss of $34.1 million a year earlier.
Analysts had expected Abercrombie to post a loss of $33.6 million, according to Refinitiv data.
Abercrombie also said it now expects adjusted earnings per share for the full year 2023 to be in the range of $1.70 to $2.10, up from its previous forecast of $1.40 to $1.80.
The company’s revenue rose 2% to $1.16 billion, driven by a 6% increase in digital sales and a 4% increase in store sales.
Abercrombie’s turnaround efforts have been led by CEO Fran Horowitz, who was brought in three years ago to revitalize the brand.
Horowitz has cut costs, closed stores, and overhauled the company’s product line, focusing on more fashionable and trend-driven pieces.
She has also ramped up Abercrombie’s digital presence and launched new marketing campaigns designed to appeal to younger shoppers.
The company’s efforts appear to be paying off, as Abercrombie has reported several quarters of consecutive sales growth.
However, the company still faces challenges, including competition from fast-fashion retailers and a shift in consumer spending toward experiences and away from apparel.
Despite these challenges, investors are encouraged by Abercrombie’s recent performance and are optimistic about the company’s future prospects.
Analysts at Jefferies wrote in a note to clients that Abercrombie is .
