Abercrombie shares jump 13% on earnings beat even as Iran conflict hits sales
Abercrombie & Fitch reported mixed first-quarter results, with a notable impact from the Middle East conflict on sales. Despite this, shares rose 13% as the company exceeded earnings estimates. The retailer anticipates continued sales growth for the fiscal year, despite challenges in the EMEA region.
- ▪Abercrombie's sales in the EMEA region fell 10% due to the ongoing conflict.
- ▪The company's earnings per share for the first quarter were $1.47, surpassing expectations of $1.28.
- ▪Abercrombie expects net sales to rise 3% to 5% for the fiscal year, with earnings per share projected between $10.20 and $11.
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Abercrombie & Fitch posted mixed first-quarter results on Wednesday and weaker-than-expected guidance after the conflict in the Middle East "directly impacted" sales, the company said. Despite those challenges, shares jumped about 13% in morning trading as the company easily topped Wall Street's earnings estimates.Sales in Abercrombie's Europe, Middle East and Africa region fell 10% during the quarter, driven by a slowdown in demand at the brand's Hollister banner that came as the conflict ramped up, finance chief Robert Ball said on a call with analysts. Overall, it reduced first-quarter total company net sales growth by more than 0.5 percentage points relative to the retailer's outlook, he said.
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