Abercrombie & Fitch Climbs on Third-Quarter Earnings Beat

Strong digital sales help the speciality retailer beat Wall Street's expectations.
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Abercrombie & Fitch  (ANF) - Get Report was climbing Tuesday after surging digital sales helped the speciality retailer beat Wall Street's third-quarter earnings expectations.

Shares of the New Albany, Ohio-based chain were climbing 9% to $24.75 in premarket trading.

Abercrombie & Fitch reported net income of $42.27 million, or 66 cents per share, up from $6.52 million, or 10 cents per share, a year ago.

Adjusted net income came in at 76 cents per share, beating the the FactSet consensus of 4 cents per share. 

Sales totaled $820 million, down 5% from a year ago, reflecting the adverse impact of COVID-19 on store sales, but coming in ahead of the FactSet consensus of $739.4 million. Digital net sales increased 43% to $382 million.

Hollister sales totaled $476.7 million last quarter, from $514.8 million a year ago. Abercrombie’s sales fell slightly to $343 million from $349 million.

"Results were fueled by 43% year-over-year digital sales growth and sequential sales improvements in our global store base," CEO Fran Horowitz said in a statement. "Updated product and marketing resonated with existing and new customers across brands and regions."

Abercrombie & Fitch said it would exit four European flagship locations early. The Dusseldorf flagship closed during the third quarter, and the London, Munich and Paris flagships will close by the end of January, all well ahead of their natural lease expirations.

Three of the leases will be transferred to a new tenant while the fourth will be subleased to a new tenant.

The company returned $28 million to shareholders during the year-to-date period ended October 31 through share repurchases and dividends, prior to the company’s decision to temporarily suspend its share repurchase and dividend programs in light of the coronavirus pandemic.