The retailer exceeded Wall Street earnings forecasts but cut current-quarter guidance due to Middle East conflict impacting sales.
Abercrombie & Fitch reported first-quarter earnings that surpassed analyst expectations, driving a 13% rise in its stock price. The company cited the Middle East conflict as a direct drag on sales, particularly in its Europe, Middle East, and Africa region, where revenue fell 10% during the quarter.
Despite the regional slowdown, which reduced total net sales growth by over 0.5 percentage points, Abercrombie reaffirmed its full-year guidance. It expects net sales to grow 3% to 5% for fiscal 2026, with earnings per share between $10.20 and $11. However, its second-quarter EPS outlook of $1.80 to $2 fell short of the $2.54 estimate.
The company emphasized efforts to manage inventory and marketing investments to mitigate external challenges. CEO Fran Horowitz noted expectations for continued sales growth in the second quarter and full year.