Abercrombie tops profit estimates as sales momentum continues

Abercrombie & Fitch Co. reported fourth-quarter earnings that exceeded forecasts, underscoring the apparel retailer’s ability to maintain momentum despite uncertain economic conditions. 

The company, which is particularly popular among millennials and Generation Z, has experienced five consecutive quarters of revenue growth, outperforming other US apparel companies such as Gap Inc., which have struggled in recent years to keep customers coming back. Chief Executive Officer Fran Horowitz has credited Abercrombie’s recent growth to strength in categories like dresses, tailored pants and activewear.

Abercrombie reported earnings of $2.97 a share for the quarter ended Feb. 3, beating analysts’ estimate of $2.82.

The shares were little changed in volatile early trading in New York. In the 12 months through Tuesday’s close, the stock had risen more than 400%. 

That’s a notable turnaround for a company that was trading at its lowest share price on record four years ago. The company has invested heavily in e-commerce, closed underperforming stores and experimented with new store formats to better serve shifting consumer habits.

The New Albany, Ohio-based company said it expects full-year net sales to rise 4% to 6%, roughly in line with analysts’ estimates but down from 21% growth in the prior fiscal year.

Comparable sales at the Abercrombie namesake brand surged 28% in the fourth quarter, which includes the key holiday season. At Hollister, the company’s brand that caters to teens and has been struggling to grow, same-store sales rose 6%.