**Abercrombie & Fitch** (NYSE:ANF) on Thursday reported better-than-expected fourth-quarter sales and raised its full-year outlook, sending its shares soaring in premarket trading. Here are the key takeaways from the retailer’s latest earnings report:
**Q4 Earnings Highlights**
* Net sales increased by 3% to $1.2 billion, exceeding analysts’ estimates of $1.17 billion.
* Comparable sales grew by 4%, driven by strength in both the Hollister and Abercrombie & Fitch brands.
* Gross margin expanded by 150 basis points to 60.1%.
* Net income surged by 85% to $121.4 million, resulting in diluted earnings per share of $1.23, which surpassed market expectations of $1.10.
**Full-Year Outlook**
* Abercrombie & Fitch raised its full-year guidance, now expecting net sales to grow by 2%-4% compared to its previous forecast of a 1%-3% increase.
* Comparable sales are projected to increase by 2%-4%, up from the prior range of 1%-3%.
* Gross margin is anticipated to expand by approximately 100 basis points.
**Market Reaction**
Investors cheered the positive results and upbeat outlook, pushing Abercrombie & Fitch shares up by over 20% in premarket trading. The stock opened at $30.00, a gain of $5.29 (21.42%) from its previous close of $24.71.
**Analyst Commentary**
Analysts attributed the company’s strong performance to its ongoing strategic initiatives, including its focus on product innovation, digital investments, and store optimization. They also noted the positive impact of favorable consumer spending trends and the easing of pandemic-related restrictions.
**Key Observations**
* Abercrombie & Fitch’s results demonstrate the resilience of the retail sector as consumers continue to return to stores and spend more on apparel and accessories.
* The company’s ability to adapt to evolving consumer preferences and invest in key growth areas is paying off.
* The raised full-year outlook indicates management’s confidence in the business’s momentum and its ability to navigate potential headwinds.
Overall, Abercrombie & Fitch’s latest earnings report and updated guidance provide a positive outlook for the company and the retail industry as a whole..
