Shares in Abercrombie & Fitch (NYSE:ANF) soared in premarket trading on Wednesday after the clothing retailer lifted its full-year sales outlook thanks in part to strong demand for its Hollister brand that has defied broader consumer spending pressures.
The Ohio-based firm said it now expects net sales to grow during its current fiscal year by around 10% from a mark of $3.7 billion in 2022, up from its prior guidance for an uptick of 2% to 4%.
In its second quarter, the group posted a 16% increase in net sales to $935.3M, well above Bloomberg consensus estimates of $846.4M. The better-than-anticipated figure comes despite retailers facing a slowdown in shopper spending on nonessential items during a time of high inflation and economic uncertainty.
Abercrombie has been attempting to refresh its line-up of offerings with dressier items and cargo pants, as well as denim bottoms aimed at catering to more casual post-pandemic work attire.
In particular, Chief Executive Officer Fran Horowitz pointed to the company’s efforts to evolve the “positioning and assortment” of its Hollister label, saying the move is “paying off.”