Shares of Abercrombie & Fitch (ANF -6.04%) are flying higher on Wednesday. The company's stock had gained 15% as of 2:36 p.m. ET. The jump came as the S&P 500 and the Nasdaq Composite were mostly flat.
The clothing retailer reported its first-quarter numbers before the market opened on Wednesday, beating Wall Street targets.
A positive quarter despite tariffs
Abercrombie released its Q1 earnings, revealing a strong quarter and guidance even in the face of tariff uncertainty. The company delivered earnings per share (EPS) of $1.59 on sales of $1.10 billion for the quarter, beating consensus expectations of $1.39 on $1.07 billion in sales.
The top- and bottom-line beat sent the company's stock soaring. Investors appeared willing to look past the company's downward adjustments to its forecast of earnings and margins for the full year. The company was projecting EPS between $10.40 and $11.40, but now expects between $9.50 and $10.50. Operating margins guidance was also cut, from 14%-15% to 12.5%-13.5%.
The company cited President Donald Trump's tariffs, especially those on goods imported from Chinese, as the main driver in lowering its guidance.
Image source: Getty Images.
Still, the results were impressive. As CEO Fran Horowitz explained, the results were "above our expectations and were supported by broad-based growth across our three regions." She attributed the success to the Hollister brand, saying that it "led the performance with growth of 22%, achieving its best ever first quarter net sales" and adding that "Abercrombie brands net sales were down 4% against 31% sales growth in 2024."
Abercrombie, which has reimagined itself for a new generation, continues to show exceptional growth at a time when many clothing retailers are struggling. I think it is a solid pick.
