Abercrombie & Fitch (NYSE:ANF) posted strong second-quarter results on Wednesday, beating Wall Street expectations for both earnings and revenue. However, despite the upbeat performance, its shares dropped over 16% intra-day following the announcement.
The apparel retailer reported adjusted earnings per share of $2.50, surpassing the projected $2.19. Revenue climbed 21% year-over-year to $1.13 billion, ahead of the $1.1 billion consensus. Comparable sales surged 18% in the quarter, with Abercrombie brands growing by 26% and Hollister brands increasing by 17%. The company’s gross profit margin also expanded by 240 basis points, reaching 64.9%.
CEO Fran Horowitz credited the strong execution for the better-than-expected sales growth and profitability in Q2.
For the full fiscal year 2024, Abercrombie raised its net sales growth forecast to 12% to 13%, up from the previous guidance of around 10%, and increased its operating margin outlook to a range of 14% to 15%. Looking ahead, the company anticipates low double-digit sales growth for the third quarter compared to Q3 2023’s $935 million in revenue.