Shares of Abercrombie & Fitch Co. (NYS:ANF) surged 7.7% toward an 18-month high in premarket trading Tuesday, after the apparel retailer reported a surprise fiscal third-quarter profit and sales that fell less than forecast, helped by strong digital sales growth. Net income for the quarter to Oct. 31 rose to $42.3 million, or 66 cents a share, from $6.5 million, or 10 cents a share, in the year-ago period. Excluding non-recurring items, adjusted earnings per share grew to 76 cents from 23 cents, while the FactSet consensus was for a per-share loss of 4 cents. Net sales fell 5.1% to $819.7 million, above the FactSet consensus of $739.4 million, with digital sales increasing 43% to $382 million. Hollister store sales fell 7% to $476.7 million but beat the FactSet consensus of $668.2 million and Abercrombie store sales slipped 2% to $343.0 million but was above expectations of $445.2 million. The company said it will close four additional flagship stores by the end of January 2021, in addition to the three previously announced flagship closures in 2020, which will leave it with eight flagship stores at the end of 2021. "We are encouraged by quarter-to-date results, including ongoing strong digital demand, with our customers responding favorably to new product and messaging," said Chief Executive Fran Horowitz. "However, this is tempered by uncertainty regarding the potential for increased COVID-related store restrictions and our expectation for elevated shipping, handling and freight costs." The stock has rocketed 114.5% over the past three months through Monday, while the S&P 500 (S&P:SPX) has gained 4.3%.
Nov. 24, 2020, 7:52 a.m. EST