By Anuja Bharat Mistry
(Reuters) -Abercrombie & Fitch’s shares surged 32% on Wednesday after it posted better-than-expected first-quarter results and forecast strong annual sales as the apparel retailer’s move to introduce fresh styles such as printed jeans and dresses helped draw more shoppers.
Shares of the company, which has been rattled by U.S. President Donald Trump’s erratic tariff policy moves, jumped to $102 after losing nearly half of their value so far this year. The stock was trading above $100 last in March.
The company’s comparable sales in Hollister brand jumped 23% from a year ago, as its vintage tees and denim collections resonated with younger customers.
Abercrombie CEO Fran Horowitz said that strength in fleece, jeans and skirts helped drive traffic in the quarter and expects to continue to ramp marketing through the crucial summer season.
However, the company cut its annual profit forecast amid expectation of uneven demand due to tariffs.
Abercrombie now expects annual net income per share in the range of $9.50 to $10.50, compared with prior forecast of $10.40 to $11.40 per share.
It targets annual net sales growth between 3% and 6%, compared with a previous range of a 3% to 5%, and also plans to repurchase $400 million of its stock for the full year.
Abercrombie’s sales forecast and its decision to stand by its store expansion strategy shows that it is confident in its ability to draw shoppers even amid uncertainty, said Rachel Wolff, analyst at eMarketer.
Abercrombie said its forecast accounted for existing tariffs that includes a 30% levy on imports from China and a 10% tariff on all other global imports.
Net of planned mitigation efforts, the full-year outlook assumes about $50 million of tariff expense, or 100 basis points as a percentage of net sales, the company added.
According to the company’s annual filing, Abercrombie estimates about 5% of total merchandise receipts were directly imported to the United States from China in fiscal 2024.
Overall, Abercrombie posted quarterly net sales of $1.10 billion for the quarter ended May 3, above analysts’ estimate of $1.07 billion, as per data compiled by LSEG.
Its quarterly adjusted profit of $1.59 per share beat estimates of $1.39 per share.