**Abercrombie shares surge amid upbeat sales and raised outlook**.
**Abercrombie & Fitch Co.** (NYSE: ANF) saw its shares jump sharply in premarket trading on Thursday as the American retailer reported better-than-expected quarterly sales and raised its full-year outlook..
**Q2 financial performance**.
In the fiscal second quarter that concluded on July 30, the New Albany, Ohio-based company’s net sales increased by 3% year-over-year to $870.1 million, surpassing analysts’ expectations of $853.4 million. On a constant currency basis, net sales climbed by 5%..
Abercrombie’s comparable sales rose by 2% during the quarter, reflecting an increase of 3% at its namesake brand and a 1% uptick at Abercrombie Kids. The company attributed the growth to strength in its key categories, including tops, bottoms, and dresses..
The retailer’s gross profit increased by 11.5% to $479.9 million, resulting in a gross margin expansion of 280 basis points to 55.2%. This improvement was primarily driven by lower promotional activity and a favorable product mix..
Abercrombie’s operating income surged by 53.3% to $165.3 million, as the company benefited from increased sales and improved margins. Net income came in at $103.3 million, or $0.92 per diluted share, compared to a net loss of $17.2 million, or $0.15 per diluted share, in the prior-year quarter..
**Raised outlook**.
Based on its strong second-quarter performance, Abercrombie raised its financial outlook for the full fiscal year 2023. The company now expects net sales to grow by approximately 2% to 3%, compared to its previous guidance of 1% to 2% growth..
Abercrombie also lifted its operating margin target to approximately 9.5%, up from its prior estimate of 8.5% to 9%. The company attributed the raised outlook to continued strength in its core categories and ongoing margin expansion initiatives..
**Management commentary**.
