Abercrombie Jumps to Six-Month High on Upbeat Sales Forecast
(Bloomberg) -- Abercrombie & Fitch Co. climbed to its highest level since August after a key sales metric topped analysts’ estimates and an upbeat forecast for the current year showed the company’s rebound has legs.
- Comparable sales increased for a sixth consecutive quarter, climbing 3 percent in the period that ended Feb. 2, more than double analysts’ predictions. Net sales this year will rise 2 percent to 4 percent, the company said. The low end of that range equates to about $3.66 billion, compared with projections for $3.61 billion.
- Digital sales are making up a significant piece of the revenue pie. Direct-to-consumer sales topped $1 billion last year, Chief Executive Officer Fran Horowitz said in a statement.
- The company’s teen-focused Hollister chain continued to resonate with consumers during the holiday quarter, and showed strong comparable sales growth of 6 percent, more than twice what analysts estimated.
- Still, the company continues to struggle to reinvigorate its namesake Abercrombie brand, which posted a 2 percent drop in comparable sales. The company said in January that weakness in women’s tops and dresses hurt the chain last quarter.
- Investors are looking to Kristin Scott to bring her successes at Hollister to the Abercrombie brand. She was promoted in November to the new role of global brands president, where she’s been tasked to drive growth at both chains.
- The shares soared as much as 19 percent to $25.50 in New York, the biggest intraday gain since November. The stock had already climbed 6.5 percent this year through Tuesday’s close.
- Abercrombie led other apparel retailers higher Wednesday. Urban Outfitters Inc. advanced as much as 4.9 percent, American Eagle Outfitters Inc. gained 4.4 percent and Ross Stores Inc. rose 2.5 percent.
- For more on the results, click here.
- For the company statement, click here.
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