Shares of Abercrombie & Fitch (NYSE:ANF) soared on Wednesday, even after the retailer slashed its profit outlook due to tariffs, which are expected to hit its business by $50 million.
The company is now expecting full year earnings per share to be between $9.50 and $10.50, down from a previous range of between $10.40 and $11.40. Analysts were expecting earnings of $10.33 a share, according to LSEG.
Abercrombie also cut its operating margin forecast, another closely watched metric by investors.
It’s now expecting its operating margin to be between 12.5% and 13.5%, down from a previous range of between 14% to 15%.
The company’s guidance includes the estimated impact from tariffs that are currently in effect, including a 30% tariff on imports from China and a 10% levy on goods from dozens of other countries. It excludes other currently paused tariffs.
Earnings per share came in at $1.59 vs. $1.39 expected. Revenue was $1.10 billion vs. $1.07 billion expected
Still, shares of Abercrombie soared 25% in premarket trading after the company issued first-quarter results that beat Wall Street’s expectations on the top and bottom lines and issued revenue guidance that beat forecasts. The stock had fallen nearly 49% this year entering Wednesday.
It leaped $19.59, of 25.4%, to $96.73 first thing after Wednesday’s opening bell.
