Abercrombie & Fitch shares jumped 36.2% this week after the retailer's fiscal second-quarter results blew past Wall Street's forecasts. Tariff refunds and stronger-than-expected sales drove a large earnings beat, and management raised its full-year outlook alongside a new buyback plan.
Abercrombie & Fitch stock rocketed 36.2% higher this week, far outpacing a market that was already moving up. Over the same stretch, the S&P 500 gained 1.1% and the Nasdaq Composite rose 1.8%. The rally followed the company's fiscal second-quarter report, published before the market opened on Wednesday.
Abercrombie crushes fiscal Q2 forecasts
The quarter, which ended Aug. 1, delivered a massive earnings beat. Abercrombie posted non-GAAP earnings of $4.17 per share, topping the average analyst forecast by $2.21 per share. Tariff refunds played a significant role in the beat, but the company also recorded stronger-than-expected operating efficiency and sales.
Revenue also topped expectations. Sales rose 5% year over year to $1.27 billion, beating the average analyst forecast by roughly $20 million. Within that total, sales for the Abercrombie brands increased 8% year over year, while Hollister sales rose 2%.
Guidance points to a stronger year ahead
Along with the beat, management issued encouraging forward guidance. The company now expects full-year sales roughly 5% above the $5.27 billion it recorded last fiscal year. It is targeting an operating margin between 14.5% and 15%, with earnings per share between $13.10 and $13.60.
Abercrombie also plans to buy back at least $500 million of its own shares. Shares last traded at $148.42, up 1.83% on the day.
Source: The Motley Fool
Trading involves risk.
Risk Disclaimer
