Abercrombie & Fitch shares soared Thursday morning after the teen apparel retailer reported quarterly earnings and sales that topped Wall Street expectations, fueled by growth of its Hollister label and momentum in the U.S.
It also announced the promotion of Kristin Scott, who had been leading Hollister, to a new position of global brands president. Stacia Andersen, the brand president of Abercrombie & Fitch, will be leaving the company, it said.
Abercrombie's stock was last up more than 20 percent in premarket trading on the news. Shares had been down about 3 percent from a year ago.
Net income for the fiscal third quarter climbed to $23.9 million, or 35 cents per share, from $10.1 million, or 15 cents per share, a year ago. Excluding one-time items, Abercrombie earned 33 cents per share, 13 cents ahead of analysts' expectations, based on a poll by Refinitiv.
Net sales grew 0.2 percent to $861.2 million, again topping estimates for $853 million.
Sales at stores open for at least 12 months were up 3 percent, better than the 1.6 percent increase forecast by analysts who cover the company. Same-store sales at Hollister were up 4 percent during the quarter, while those at Abercrombie were up 1 percent. In the U.S., same-store sales were up 6 percent, while they were down 3 percent internationally.
Abercrombie said digital sales were up 16 percent globally, as it continues to invest in its website and more online delivery options.
The company added it now expects to close fewer stores this year "based on improved performance and successful lease renegotiations." It previously was planning to shut 60 stores, primarily in the U.S., but now is calling for 40 closures by the end of the year.
"We had a solid start to the holiday season," CEO Fran Horowitz said in a statement.
Abercrombie is, meanwhile, calling for net sales and same-store sales to climb between 2 percent and 4 percent for the full year, with net sales falling in the mid-single digits and same-store sales rising by the low-single digits during the fourth quarter.
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