NEW YORK, United States — Shares in Abercrombie & Fitch Co. climbed more than 10% in premarket trading on Thursday after the struggling U.S. teen retailer raised its full-year outlook on the back of better-than-expected third-quarter sales and a more optimistic outlook for the critical holiday season. The retailer said net sales rose 3% to $860.4 million in the three months ended October 29, narrowly beating market forecasts, even as comparable sales fell 1%, weighed down by store closures. Abercrombie & Fitch, which has been working to turn around its business after years of declining sales, said it now expects full-year net sales to be between $3.59 billion and $3.63 billion, up from its previous guidance of $3.53 billion to $3.59 billion. The company also raised its adjusted operating income outlook to between $200 million and $210 million, up from $175 million to $195 million previously.
The upbeat outlook from Abercrombie & Fitch, which has been working to reinvent itself with a more inclusive image and focus on sustainable practices, comes as other teen retailers are also showing signs of recovery. American Eagle Outfitters Inc. and Urban Outfitters Inc. have both reported strong recent results, indicating that the teen retail sector may be on the mend after years of struggling with the rise of online shopping and fast fashion. Abercrombie & Fitch’s shares were up 10.2% at $28.25 in premarket trading on Thursday, indicating that investors are encouraged by the company’s progress. The stock has gained nearly 30% so far this year, outperforming the broader market.
Here are some of the key highlights from Abercrombie & Fitch’s third-quarter earnings report:
* Net sales rose 3% to $860.4 million, beating market forecasts
* Comparable sales fell 1%, dragged down by store closures
* Adjusted operating income increased to $81.4 million
* The company raised its full-year net sales outlook to between $3.59 billion and $3.63 billion
* Abercrombie & Fitch also raised its adjusted operating income outlook to between $200 million and $210 million
Overall, Abercrombie & Fitch’s third-quarter results and raised outlook indicate that the company is making progress in its turnaround efforts. The company’s focus on inclusivity, sustainability, and digital innovation appears to be resonating with consumers, and the company is well-positioned to benefit from the recovery in the teen retail sector..
