Key facts
- Abercrombie & Fitch raised its full-year sales forecast to 5%-7% growth.
- The company's sales growth is attributed to resilient demand for its apparel, especially Hollister dresses and denim jeans.
- Abercrombie warned of $90 million in increased costs due to higher tariffs.
- Net sales for the quarter ended August 2 were $1.21 billion.
- Adjusted profit per share was $2.32, exceeding estimates.
Abercrombie & Fitch has increased its full-year sales forecast, projecting growth between 5% and 7%, up from its previous estimate of 3% to 6%. This upward revision is driven by robust consumer demand for its apparel, particularly Hollister dresses and denim jeans, with shoppers showing resilience in spending on trendy items despite price increases.
The company's eponymous brand and Hollister have seen growth by targeting affluent female shoppers who have demonstrated a willingness to invest in premium apparel. However, Abercrombie cautioned that higher tariffs on countries including Vietnam, Indonesia, Cambodia, and India are expected to increase costs by $90 million this year, a revision from the previously estimated $50 million in tariff expenses.
For the second quarter ended August 2, Abercrombie reported net sales of $1.21 billion, surpassing analysts' average estimate of $1.20 billion. The company's adjusted profit of $2.32 per share also exceeded expectations of $2.30 per share. Executives indicated that the company would maintain tight control over inventory levels to mitigate the impact of tariffs and support its growth strategies.