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NEW ALBANY, United States — Abercrombie & Fitch Co surged in early trading 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 February 2, more than double analysts’ predictions. Net sales this year will rise 2 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.
Source: Bloomberg
Digital sales are making up a significant piece of the revenue pie. Direct-to-consumer sales topped $1 billion last year, chief executive Fran Horowitz said in a statement.
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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 jumped as much as 11 percent in premarket trading. The stock had already climbed 6.5 percent this year through Tuesday’s close.
By Lisa Wolfson with assistance from Karen Lin; editors: Anne Riley Moffat, Jonathan Roeder.
