Shares of lifestyle retailer Abercrombie & Fitch Co. (ANF) surged 28% in Wednesday’s premarket after the company reported better-than-expected first-quarter (Q1) earnings.
Abercrombie’s Q1 2025 (FY25) net sales increased 8% year-on-year (YoY) to $1.1 billion, beating the analyst consensus estimate of $1.05 billion, as per Finchat data.
The company's adjusted earnings per share (EPS) stood at $1.59, exceeding the consensus estimate of $1.36.
This performance was bolstered by strong demand for Abercrombie’s Hollister brand, which saw a 23% rise in comparable sales, driven by popular items like vintage-style tees and denim.
The Abercrombie brand experienced a 10% decline in comparable sales, attributed to ongoing brand repositioning efforts.
The Americas segment achieved a 9% increase in net sales, totaling $636.1 million. Internationally, the Asia-Pacific region saw an 11% rise in sales, while the Europe, Middle East, and Africa (EMEA) region experienced a 15% decline.
The company's gross margin expanded by 570 basis points to 61%, primarily due to reduced freight costs and higher average unit retail prices. The operating margin declined 340 basis points to 9.3%.
Abercrombie ended the quarter with cash and cash equivalents of $511 million.
For FY25, the company projects net sales growth of 3% to 6%, an operating margin between 12.5% and 13.5%, and net income per diluted share ranging from $9.50 to $10.50.
For Q2, the company anticipates net sales growth of 3% to 5%, and net income per diluted share ranging from $2.10 to $2.30.
On Stocktwits, retail sentiment around Abercrombie & Fitch turned to ‘extremely bullish’ from ‘bullish’ the previous day.
A Stocktwits user lauded the earnings.
Another user highlighted that the company’s stores attract younger crowds.
Abercrombie & Fitch stock has shed over 48% in 2025 and over 49% in the last 12 months.
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