Abercrombie & Fitch shares soar on record Q2, guidance upgrade

(Sharecast News) - Shares in Abercrombie & Fitch surged on Wednesday in New York after the American fashion group reported record sales for the second quarter and raised its full-year outlook.

Net sales over the second quarter rose 5% year-on-year to $1.27bn, a new quarterly high and ahead of the $1.25bn consensus forecast.

Net income rose to $253.7m from $221.8m, helped by a tariff refund benefit of $100m and an operating margin of 20% above the company's own forecasts.

All major regions reported net sales growth over last year, with the Americas up 5%, Asia Pacific up 19% and EMEA rising 2%.

Net sales in the Abercrombie business were up 8% at $596.8m, while the Hollister brand reported 2% growth to $669.9m.

However, comparable sales were more or less flat across the group as a whole, as a 4% improvement at Abercrombie was offset by a 3% decline at Hollister.

Looking ahead, the company said third-quarter net sales would likely grow by 5-6%, above the current 4.3% market projection, and full-year growth would be "around 5%", up from earlier guidance of 3-5%.

Full-year adjusted earnings per share are tipped to come in at $13.10-13.60, well ahead of the $10.20-11.00 previously guided to.

"After a strong start to the year, we are updating our full-year sales and operating margin outlook and remain confident in our long-term growth path and investment priorities," said boss Fran Horowitz.

The stock was up 22% at $133.29 in early deals on Wall Street.