- Abercrombie & Fitch shares jumped 31% on Wednesday after posting a surprising first quarter profit.
- Results were boosted by lower freight costs and higher prices.
- The retailer raised its outlook for full-year net sales and operating margin.
Shares of Abercrombie & Fitch (ANF) skyrocketed 31% on Wednesday after the mall retailer posted a surprise profit and raised its full-year guidance.
Abercrombie reported first quarter earnings per share (EPS) of $0.39. Analysts had expected a loss of $0.05. Revenue rose 2.9% to $836 million, also ahead of forecasts. Comparable store sales were up 3%, while estimates were for a drop of 1%.
The retailer pointed to a significant decline in freight costs and an increase in prices, or average unit retail (AUR), for the strong results.
CEO Fran Horowitz noted AUR jumped by a double-digit percentage since the COVID-19 pandemic, calling that “a big win for us.”
She added that Abercrombie’s products are “resonating meaningfully with our target customer,” setting several sales records across genders, categories, and geographies.
The company now anticipates 2023 net sales growth in a range of 2% to 4%, up from its previous outlook of higher by 1% to 3%. It sees operating margin of 5% to 6%, compared to the earlier 4% to 5% range.