May 27 (Reuters) – Abercrombie & Fitch beat first-quarter profit estimates, helped by steady domestic demand on Wednesday, but flagged some weakness in its Europe, the Middle East and Africa segment due to the ongoing U.S.-Israeli war with Iran.
Shares of the apparel retailer, which maintained its annual forecasts, were up 4% in premarket trading. They have declined more than 40% so far this year.
Abercrombie lured in shoppers from lower-income, value-conscious households with discounts while retaining its base of more affluent customers who spend freely.
This helped the company weather macroeconomic uncertainty in the U.S. and record a sales growth of 3% in the Americas segment for the three months ended May 2.
Abercrombie positions itself between premium and mass market, offering aspirational apparel at accessible prices. Its upbeat results echoed those of Capri and Bath & Body Works as demand for affordable luxury remained resilient.
The company said it has applied for refunds of around $100 million it had paid under the International Emergency Economic Powers Act, following the Supreme Court striking down the tariffs. The firm now sees a 20 basis point annual impact from the duties, down from its prior forecast of 70 basis points.
Abercrombie reported quarterly adjusted net income per share of $1.47. Analysts on an average had expected $1.28, according to data compiled by LSEG. A 2% rise in net sales to $1.1 billion broadly met estimates.
The company, which recorded a 24% rise in sales in its Asia Pacific segment, said sales in the Europe, the Middle East and Africa segment fell 10%. It had warned of a “slight sales hit” from the Middle East conflict in March.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Joyjeet Das)
Comments