Abercrombie & Fitch reported first-quarter earnings per diluted share of $1.47, beating analyst expectations and sending ANF stock up in premarket trading on Wednesday. The consensus analyst estimate had been $1.27 per share, per Yahoo Finance.
Net sales rose 2% from a year earlier to $1.1 billion, marking the company’s 14th consecutive quarter of sales growth, the company said. Wall Street had been looking for $1.12 billion in quarterly revenue, meaning the result came in just below expectations, per Markets Financial Content. Profitability narrowed on a year-over-year basis, with the operating margin slipping to 8% from 9.3% twelve months prior.
Growth varied by region. Sales in the Americas rose 3% to $899.9 million, while Asia-Pacific sales jumped 24% to $46.5 million. Revenue in the EMEA region fell 10% to $167.4 million. The company said this drop was due to weaker consumer sentiment from the ongoing Middle East conflict, which especially affected the Hollister brand.
“In EMEA, demand softened as the Middle East conflict ramped up, particularly impacting Hollister Brands, and we are proactively managing inventory and marketing to support the region,” CEO Fran Horowitz said in a statement.
After the Supreme Court struck down the tariffs, Abercrombie requested about $100 million in refunds for duties it had paid under the International Emergency Economic Powers Act, according to Reuters. The new tariff outlook is expected to reduce full-year results by about 20 basis points, which is much better than the 70 basis points the company had forecast earlier.
Abercrombie repurchased $105 million in stock during the quarter, representing a 3% reduction in shares outstanding from the start of the year. The company said it has $745 million remaining on its share repurchase authorization.
For the full year, Abercrombie maintained its outlook for net sales growth of 3% to 5% and net income per diluted share in the range of $10.20 to $11.00. For the second quarter, the company forecast net sales growth of 2% to 4% and earnings per diluted share of $1.80 to $2.00.
Heading into Wednesday’s open, ANF shares were trading roughly 4% higher, though the stock remains down more than 40% on a year-to-date basis, according to Reuters.