NEW YORK (AP) — Clothing store chain Abercrombie & Fitch Co. raised its earnings guidance for the year on Thursday, citing better-than-expected sales and cost cuts.
Its shares jumped in after-hours trading.
Clothing chains that cater to teens have been under pressure in recent months. Chains have been competing on price, hurting their profit margins.
"Given the challenging and promotional retail environment, we are pleased that our quarter-to-date performance has exceeded expectations," said CEO Mike Jeffries in a statement.
Abercrombie said it expects adjusted earnings of $1.55 to $1.65 per share for the fiscal year, which ends this month, up from its earlier outlook of $1.40 to $1.50 per share. The outlook does not include charges related to the company's restructuring plans and other items.
Analysts, on average, were expecting earnings of $1.48 per share, according to a poll by FactSet.
In the nine weeks through Jan. 4, a period that includes the crucial holiday shopping season, sales at stores open at least a year fell 6 percent.
This metric is a considered a key indicator of a retailer's health. It excludes the potentially distorting results from stores recently opened or closed over the past year.
Shares rose $5.40, or 16 percent, to $38.61 in after-hours trading. The New Albany, Ohio-based company's stock had closed up 29 cents at $33.21. It's down 30 percent over the past 12 months.