Abercrombie & Fitch raises annual profit forecast on Hollister strength; shares jump

Abercrombie & Fitch raised its annual profit forecast on Tuesday, betting on strong demand for its Hollister brand of dresses and jackets as shoppers snap up in-trend apparel during the crucial holiday season.

Shares in the Ohio-based company jumped more than 18 per cent in premarket trading, after it also forecast a strong holiday quarter and beat third-quarter sales estimates.

The clothing retailer, whose denim jeans sell for US$100 on average, has benefited from a strong online presence and resilient spending among affluent consumers despite broader economic uncertainties stemming from tariffs.

Attractive deals and discounts, combined with its partnership with the NFL as the league’s first official fashion collaborator, have also boosted its popularity.

Its Hollister brand posted a 15 per cent like-for-like sales growth in the third quarter, helped by the onset of the fall season and strong performance during discounts. Hollister contributes to more than half of Abercrombie & Fitch’s total sales.

For the fourth quarter, the retailer forecast sales to grow between four per cent and six per cent and profit in the range of $3.40 to $3.70 per share, banking on growing demand for outerwear among young shoppers.

The company said it expects net income per share for fiscal 2025 to be between $10.20 and $10.50, the midpoint of which is higher than its previous range of $10.00 to $10.50.

It expects annual net sales to grow between six per cent and seven per cent, compared with its prior forecast of a five per cent to seven per cent increase.

Rival Gap also beat third-quarter comparable sales and profit estimates last week, helped by strong marketing-driven demand for its apparel.

Abercrombie’s net sales rose seven per cent to $1.29 billion for the quarter ended Nov. 1. Analysts on average estimated $1.28 billion, according to data compiled by LSEG.

(Reporting by Prerna Bedi in Bengaluru; Editing by Shilpi Majumdar)