Abercrombie & Fitch jumps 11% as Q1 profit beats estimates

Abercrombie & Fitch reported adjusted EPS of $1.47, beating the $1.28 consensus, sending shares up 11%.

"We delivered record first quarter net sales and our 14th consecutive quarter of growth, reflecting our teams' consistent execution for our customers amid a dynamic global environment," Chief Executive Officer Fran Horowitz said.

Revenue rose 1.5% year-over-year to $1.1 billion, slightly below the $1.12 billion analysts expected. Comparable sales fell 1%. The Americas segment grew 3%, while Asia Pacific surged 24%. Sales in Europe, the Middle East and Africa dropped 10%, hurt by the ongoing conflict with Iran.

Shares jumped 11.1% to $83.20 in morning trading, paring some of the 40% decline the stock has suffered this year. The company maintained its full-year sales and operating margin forecasts, signaling confidence despite regional headwinds.

The retailer has been targeting affluent shoppers, who continue spending freely, while discounts attracted value-conscious households from lower income brackets. That strategy helped Abercrombie counter macroeconomic uncertainty in the US and post record sales in the Americas segment for the three months ended May 2.

The EMEA weakness had been flagged by the company in March, when it warned of a "slight sales hit" from the Middle East conflict. The 10% decline in the region primarily affected the Hollister brand, the company said.

The guidance hold suggests management expects the Americas and APAC momentum to persist. Investors will watch the next quarterly report for signs of stabilization in the EMEA region and whether comparable sales can return to positive territory.

This article is for informational purposes only and does not constitute investment advice.