Abercrombie & Fitch Shares Jump After Earnings Beat Estimates

NEW ALBANY, United States — Abercrombie & Fitch Co. jumped as much as 19 percent in early trading after the teen-clothing chain posted a surprise profit, fueling optimism that it can recover from years of slumping sales.

Excluding certain items, earnings amounted to 12 cents a share in the second quarter, the New Albany, Ohio-based company said in a statement Wednesday. Analysts had estimated a loss of 4 cents on average, according to data compiled by Bloomberg.

Abercrombie has been retooling its business since longtime Chief Executive Officer Michael Jeffries stepped down in December. Though it still doesn’t have a permanent leader, the company has revamped its stores and product line in a bid to reconnect with teen shoppers. That appears to be paying off. Its sales performance was better than predicted last quarter, especially at its Hollister chain.

“Our results exceeded what we signaled in our first quarter earnings call and give us confidence that we are on the right track, although we recognize that we still have much to achieve,” Executive Chairman Arthur Martinez said in the statement.

The stock rose as high as $20.50 in early trading after the company posted the numbers. The rally followed a 40 percent decline for the shares this year.

Abercrombie’s comparable-store sales — a closely watched measure of retail performance — still fell year-over-year last quarter, but not as sharply as expected. They declined 4 percent in the period, better than the 6 percent decrease predicted by analysts, according to Consensus Metrix. The company’s Hollister chain fell just 1 percent by that measure. That beat an estimated 4.7 percent drop.

By Nick Turner.