The once struggling teen retailer's comparable store sales shot higher, crushing analysts' forecasts. As Fred Katayama reports, strong sales at its Hollister brand led the revival.
Abercrombie & Fitch showing signs of a turnaround. The once struggling teen retailer's sales at established stores rose 4 percent after more than a year of declines. That crushed analysts' forecasts. Helping revive A&F: strong sales at its surfwear brand, Hollister. Overall profit leapt more than 20 percent, far outstripping analysts' targets. Abercrombie & Fitch shares blasted higher at the start of trading Friday. RBC Capital Markets analyst Brian Tunick expects more from the turnaround, saying, "The Hollister improvements, strides at A&F, and still solid balance sheet suggest a longer tail to the Abercrombie & Fitch story." Teen retailers like Abercrombie had been struggling with declining sales the last four years as customers flocked to fast-fashion chains. Abercrombie, then known for its logo-emblazoned apparel, added trendier denim and floral prints to its shelves, and it dropped its risqué ads. It's optimistic about the near future. It sees the promotional environment stabilizing, and it forecasts strong net sales in the fourth quarter.