Shares of Abercrombie & Fitch Co. got an early Wednesday morning lift after the company reported a solid topline performance in the first quarter, particularly at its Hollister brand, and projected further sales gains for the year.
Total net sales of $1.1 billion were up 8 percent in the first quarter ended May 3, from $1.02 billion last year; comparable sales rose 4 percent. That impressed investors, who pushed the stock price up 5.4 percent to $77.89 in pre-market trading Wednesday.
However, net income declined to $80.4 million, or $1.59 per diluted share in the quarter ended May 3, from $113.9 million, or $2.14 per diluted share in the year-ago quarter. Operating income of $102 million compared to operating income last year of $130 million. Operating margin as a percent of sales decreased to 9.3 percent from 12.7 percent last year.
“We delivered record first quarter net sales with 8 percent growth to last year,” Fran Horowitz, A&F’s chief executive officer, said in a statement Wednesday morning. “This was above our expectations and was supported by broad-based growth across our three regions. Hollister brands led the performance with growth of 22 percent, achieving its best-ever first quarter net sales, while Abercrombie brands net sales were down 4 percent against 31 percent sales growth in 2024. We exceeded our expectations on the bottom line as well, with operating margin of 9.3 percent and earnings per share of $1.59. We also returned excess cash to shareholders through share repurchases totaling $200 million in the quarter, marking our fifth consecutive quarter of share repurchases.
“As we navigate the current environment,” Horowitz added, “we have the team and proven capabilities in place to read, react and adapt, while continuing to deliver for customers globally. Importantly, with a strong foundation, we remain on offense and focused on top-line growth, store expansion, and investments in digital and technology that will enable sustainable long-term success.”
By brand, sales at Abercrombie in Q1 slipped 4 percent to $547.9 million from $571.5 million in the year-ago period. Hollister, however, showed a 22 percent gain in sales to $549.4 million, from $449.2 million in the year-ago period.
The company is now forecasting sales to grow 3 to 6 percent this year, versus its previous forecast of sales growth ranging from 3 to 5 percent.
Net income per diluted share is now seen ranging from $9.50 to $10.50, versus the previous forecast of $10.40 to $11.40 per diluted share. The company indicated that the current outlook for net income per diluted share and diluted weighted average shares includes the anticipated impact to shares outstanding from potential share repurchase activity in fiscal 2025. The timing and amount of any such repurchases will be determined based on an evaluation of market conditions, the company’s share price, legal requirements, and other factors.
Second quarter sales are seen increasing 3 to 5 percent, while net income per diluted share is seen ranging from $2.10 to $2.30.
