Abercrombie surges on raised outlook after tallying tariff cost
Abercrombie & Fitch Co. shares rose sharply in premarket trading Wednesday after the retailer upped its full-year outlook, suggesting the retailer is confident in its ability to navigate the changing tariff landscape.
The fashion retailer now sees full-year net sales growth of 3% to 6%, up from its estimate of 3% to 5% in March. This includes approximately $50 million of tariff expenses.
Comparable sales for the Abercrombie namesake brand fell 10% in the quarter ending May 3, a bigger drop than analysts were anticipating, the New Albany, Ohio-based company said. Hollister brand comparable sales were up 23%, far surpassing expectations.
While Abercrombie's fashion mix has drawn in a broader audience and increased sales in recent quarters under Chief Executive Officer Fran Horowitz, the company now faces uncertainty due to the Trump administration's shifting tariff policies.
Chinese goods had faced tariffs of as much as 145% until President Donald Trump paused the hike earlier this month. But Abercrombie has been reducing its exposure to China in recent years, with its imports representing 7% of the total cost of merchandise receipts in fiscal 2024, down from 13% two years earlier. Vietnam is the retailer's top vendor, followed by Cambodia and India.
Abercrombie shares gained as much as 33% in premarket trading in New York on Wednesday. Year to date, the stock had fallen 48% through Tuesday's close as the S&P 500 Index gained 0.7%.
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