Apparel retailer Abercrombie & Fitch (NYSE:ANF) reported a smaller-than-expected decline in comparable-store sales thanks to strong demand for its Hollister brand.
Same-store sales for the Hollister brand rose by 3% after two years of flat sales. Analysts were expecting sales to grow by just 0.8%.
Shares of Abercrombie & Fitch (NYSE:ANF) increased by 4% to $13.41 in premarket trading hours.
Sales at established stores declined by 3% in the first quarter, beating the 3.4% decline expected by analysts.
Net sales at Abercrombie slipped 3.6% to $661.1 million, beating estimates of $651.3 million. The company’s net loss widened to $61.7 million (91 cents per share) from $39.6 million (59 cents per share).
Abercrombie & Fitch (NYSE:ANF) Loses 71 Cents Per Share
Excluding charges, the company lost 71 cents per share.
Teen clothing retailers, like Abercrombie, have been struggling as more young shoppers turn to fast-fashion retailers like Forever 21 and H&M. Some retailers, including Wet Seal and Aeropostale Inc, have filed for bankruptcy protections.
After struggling to turnaround sales, Abercrombie & Fitch put itself up for sale. Despite changes to its marketing and advertising, a key sales figure is still weak. Rival retailer American Eagle Outfitters Inc (AEO) is working with Cerberus Capital Management, a private equity firm, to put a bid on Abercrombie.
News of the bid comes after Abercrombie confirmed earlier in the month that it was in initial talks with several buyers.
“There can be no assurance these discussions will lead to a definitive agreement or that a transaction will be consummated,” the company said in a written statement regarding speculation of potential bidders.
Clothing store Express Inc. (EXPR) was also rumored to be interested in making an offer for Abercrombie.
Rumors of American Eagle’s bid sent Abercrombie shares soaring yesterday, up 9% Wednesday afternoon. The company’s stock is down 49% in the last 12 months.
Shares of American Eagle also gained, rising 3%.