Abercrombie & Fitch reported a net income of $67.13 million, or $1.47 per share, for the quarter ending May 2, surpassing Wall Street's earnings estimate of $1.28 per share. Revenue reached $1.11 billion, slightly below the expected $1.12 billion, reflecting a 2% increase from the previous year.
The company attributed a 10% decline in sales in its Europe, Middle East, and Africa (EMEA) region to decreased demand at its Hollister brand amid ongoing regional conflicts. Despite these challenges, Abercrombie's overall sales grew by 2%, primarily driven by new store openings and favorable foreign exchange rates rather than organic demand.
Looking ahead, the company expects earnings per share for the current quarter to fall between $1.80 and $2, significantly lower than the $2.54 anticipated by analysts. However, Abercrombie reaffirmed its full-year guidance, projecting a 3% to 5% increase in net sales and earnings per share of $10.20 to $11.
The company is also benefiting from reduced tariff impacts following a Supreme Court ruling, which is expected to improve its profitability outlook. Abercrombie's finance chief, Robert Ball, emphasized the importance of managing inventory and marketing investments to navigate current market conditions