NEW YORK, United States — Shares in Abercrombie & Fitch Co. rose sharply on Thursday after the struggling teen retailer boosted its full-year outlook, despite reporting a wider-than-expected quarterly loss.
The company’s stock jumped 22.1% to $23.84 in premarket trading after it said it now expects fiscal 2023 net sales to be in the range of $3.55 billion to $3.65 billion, up from its previous forecast of $3.45 billion to $3.55 billion.
Abercrombie & Fitch also raised its adjusted earnings per share outlook to a range of $2.55 to $2.75, compared with its prior guidance of $2.40 to $2.60.
The revised outlook reflects the company’s continued progress in executing its strategic plan, which includes a focus on product innovation, marketing, and customer experience. Abercrombie & Fitch has been working to improve its merchandise assortment and marketing campaigns in recent years in an effort to attract younger shoppers.
The company’s efforts appear to be paying off, as evidenced by its recent financial results. In the second quarter, Abercrombie & Fitch reported a net loss of $24.4 million, or $0.36 per share, compared with a loss of $20.8 million, or $0.31 per share, in the year-ago period.
Total net sales increased 3% to $869.4 million, driven by strength in the company’s digital channel and international markets. Comparable sales rose 2%.
Despite the wider-than-expected loss, investors were encouraged by the company’s upbeat outlook and its progress in executing its strategic plan. Abercrombie & Fitch shares have now gained more than 50% year-to-date.
The company’s turnaround is a welcome sign for the struggling teen retail sector. Abercrombie & Fitch is one of the few teen retailers that has managed to remain profitable in recent years, thanks to its focus on product innovation and customer experience. The company’s recent results suggest that its turnaround efforts are gaining traction, and that it is well-positioned to continue to succeed in the future..
