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Abercrombie and Fitch rally as 3Q earnings smash expectations

Major stocks in the United States

Shares of Abercrombie and Fitch staged a major rally on Friday last week as the firm reported forecasts-surpassing earnings and revenue for its third quarter of the fiscal year.

Based on the figures, the clothing company registered a net income of $10.1 million, equivalent 15 cents per share in the past three months, an increase from $7.9 million or 12 cents per share earned in the same period of the previous year.

Meanwhile, experts were expecting an $820 million revenue in the third quarter but A&F managed to beat expectations as it posted $859.1 million, up from $821 million in the year prior.

With the news, Abercrombie and Fitch shares in the stock market jumped by a whopping 25% to settle at $15.09 per share.

A&F and other retail firms have experienced steeped sales declines in the past four years due to the global phenomenon brought by online and fast-fashion chains.

With this big challenge, the firm responded by refreshing its line of logo-emblazoned and abandoning its risque advertising.

Fran Horowitz, the company’s chief executive, stressed, “We are pleased by the clear progress across all brands, delivering another quarter of sequential comparable sales improvement, and a return to positive comparable sales”.

The Ohio-based firm tallied 4% jump in its same-store sales in the last quarter, on the back of an 8% advancement in Hollister despite 2% drop in the namesake brand. Analysts were expecting an average 0.4% rise.

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