Abercrombie & Fitch Co. (NYSE:ANF) witnessed a substantial surge in its share value following an upward revision of its full-year guidance, indicating that there’s still considerable enthusiasm among some teenagers and young millennials to spend, provided the styles and prices align.
This optimistic projection also signifies the resurgence of Abercrombie & Fitch’s (NYSE:ANF) popularity among young shoppers, a trend reminiscent of about a decade ago. The brand recently reported its highest second-quarter sales since 2011, marking the company’s tenth consecutive quarter of revenue growth.
Key items like dresses, Abercrombie’s Sloane tailored pant line, the YPB activewear line, and men’s apparel experienced robust sales in the latest quarter. This momentum has seamlessly carried into August, according to executives.
Speaking during an earnings call, Chief Executive Officer Fran Horowitz emphasized, “We are no longer a jeans and t-shirt brand. We really have expanded into a lot of categories. This young millennial can now wear this brand from work to their weekend getaway.”
The stock surged by 21% at the opening of the New York market, reaching its highest level in a decade.
Abercrombie has now revised its net sales projection for the current fiscal year, expecting a 10% increase, compared to the earlier forecast of 2% to 4%. Analysts had initially anticipated a 4% growth. Citi analyst Paul Lejuez stated in a research note, “Even with the guidance raise, we believe 2H guidance still looks conservative.”
He hailed Abercrombie & Fitch as “the brightest star in the sky,” highlighting its exceptional performance relative to most peers.
While certain retailers like Kohl’s Corp. (NYSE:KSS) and Macy’s Inc. (NYSE:M) have grappled with sustaining sales amid a shift in consumer spending towards travel and entertainment, brands resonating with customers continue to thrive. Urban Outfitters Inc., in a separate report on Tuesday, also revealed better-than-expected growth in comparable sales for the most recent quarter.
Both Abercrombie (NYSE:ANF) and Hollister achieved increased merchandise sales with reduced promotions. Hollister, a brand targeted at teenagers, had previously posed challenges to Abercrombie’s overall performance until the current quarter. Horowitz noted on the earnings call that their strategic approach is yielding positive results.
Featured Image: Unsplash @ Taylor Friehl
