What happened

Shares of Abercrombie & Fitch (NYSE:ANF) were looking dapper today as the preppy clothier jumped on a strong earnings report. Same-store sales rose 4% in the quarter, leading to significantly better results than expected. As of 12:58 p.m. EST, the stock was up 25.1%.

A pair of Abercrombie models pose inside and beside a pickup truck.

Image source: Abercrombie & Fitch.

So what

Overall revenue was up 5% to $859.1 million, which was much better than expectations of $820 million. Performance at Hollister was impressive once again, with comparable sales up 8%, while comps dipped 2% at namesake Abercrombie & Fitch stores. Domestic results were also solid, with same-store sales up 6% compared to flat growth abroad.

Adjusted earnings per share surged from $0.02 to $0.30, beating estimates of $0.22, as store operating and distribution expenses fell 320 basis points. CEO Fran Horowitz said, "We are pleased by the clear progress across all brands, delivering another quarter of sequential comparable sales improvement, and a return to positive comparable sales." She also credited "disciplined expense management" for the bottom-line approval.

Now what

Guidance for the holiday quarter was also solid: The company sees same-store sales increasing in the low single digits, and a 1-percentage-point decrease in operating expenses, indicating earnings per share should be up significantly from $0.75 in the quarter a year ago.

Abercrombie is still only on track to post minimal profits for the year, as its first-half performance was dismal. But thanks to a better merchandise assortment and improved cost management, the bottom-line improvement should carry over into next year.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.