By Connor Hart

Abercrombie & Fitch's shares surged 35% Tuesday after the retailer said trends are improving for its flagship brand and shoppers are continuing to flock to Hollister.

The company said back-to-school sales were strong. Its namesake brand particularly benefited from a healthy transition to cold-weather categories in women's apparel, Chief Executive Fran Horowitz said, resulting in a sequential improvement in comparable sales.

Shares jumped to $88.53 Tuesday, in part because the company's flagship brand posted same-store sales that weren't as bad as Wall Street had feared, Raymond James analysts said. Sales from stores and digital channels in operation for at least a year slipped 7% across Abercrombie's namesake banner, marking an improvement from the second quarter's 11% decline.

Despite the stock's pop, it has lost about 40% of its value over the past year.

Wall Street had low expectations before the results were released, and downbeat forecasts weighed on shares Monday, when the stock closed at $65.61. Raymond James analysts said channel checks during the third quarter pointed to ongoing softness and higher year-over-year promotions, and they forecast comparable sales that missed expectations.

Instead, Abercrombie delivered a modest top-line beat, largely driven by stronger-than-expected performance from Hollister, while the namesake brand showed sequential improvements, William Blair analysts said.

The clothing retailer also narrowed its full-year outlook toward the high end of its ranges. Looking ahead, Horowitz said the company has healthy inventory and strong marketing plans heading into the holiday season, after the retailer used the past few quarters to test out its assortment and positioning.

For the year, Abercrombie raised the low end of its full-year sales outlook to up 6% from up 5%, while maintaining the high end at up 7%. The company also increased the floor of its earnings outlook to $10.20 a share from $10 a share, while maintaining a ceiling of $10.50 a share.

During the third quarter, Hollister continued to perform well, with a 15% increase in comparable sales. Horowitz said Hollister continues to benefit from balanced growth across both men's and women's apparel, as well as tight inventory that is driving higher prices.

Company-wide sales climbed nearly 7% during the recent quarter, to $1.29 billion, slightly ahead of Wall Street's expectations, according to FactSet. The increase was driven by Hollister, where sales climbed 16%, and slightly offset by the namesake brand, which logged a 2% drop in sales.

For its quarter ended Nov. 1, Abercrombie posted a profit of $113 million, compared with $132 million, a year earlier. Third-quarter earnings of $2.36 a share topped analyst expectations for $2.17 a share.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

November 25, 2025 14:22 ET (19:22 GMT)

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