(Reuters) -Abercrombie & Fitch raised its forecast for annual sales on Wednesday, betting that newer styles at its Abercrombie label and improved assortment at Hollister would pull more shoppers even as consumer spending remains pressured in the U.S.
Shares of the Ohio-based company jumped about 17% in premarket trading, after it also topped market expectations for second-quarter sales.
Abercrombie has been filling its shelves with a fresh collection of styles, including more dressy apparel and cargo pants, while also capitalizing on the demand for wide-legged or cleaner-look denim bottoms, as jeans become a post-pandemic workwear wardrobe staple.
The company’s eponymous Abercrombie label has also ranked among the top five clothing brands that back-to-school shoppers chose, a survey by William Blair showed.
Net sales at the Abercrombie brand jumped 26% in the three months ended July 29, while the Hollister division posted an 8% rise.
The company said it now expects net sales to rise around 10% for fiscal 2023, compared with its prior forecast range of 2% to 4% growth. Analysts, on average, had estimated a 3.9% rise to $3.84 billion in revenue, according to Refinitiv IBES data.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shweta Agarwal)
