Abercrombie & Fitch posted quarterly same-store sales growth after more than a year of declines and forecast robust sales for the holiday quarter, as its California-themed surfwear brand Hollister helped revive the retailer.
Shares of the company, which also beat its third-quarter net sales and profit estimates, jumped 25 percent to $15.09 in premarket trading on Friday. The stock has lost nearly a quarter of its value in the past 12 months.
Abercrombie and other teen retailers have struggled amid nearly four years of declining sales, as customers shopped at fast-fashion chains and online.
In response, Abercrombie shed its risqué advertising, and refreshed its line of logo-emblazoned, high-priced basics to include trendier denim and floral prints in its line of clothing.
"We are pleased by the clear progress across all brands, delivering another quarter of sequential comparable sales improvement, and a return to positive comparable sales," Chief Executive Fran Horowitz said.
Same-store sales of Hollister, the key revenue contributor in recent quarters, rose 8 percent. Analysts on average had expected a 2.9 percent rise, according to Thomson Reuters I/B/E/S.
"The Hollister improvements, strides at A&F, and still solid balance sheet suggest a longer tail to the ANF story," RBC Capital Markets analyst Brian Tunick wrote in a client note.
Net revenue rose nearly 5 percent to $859.11 million, beating analysts' average estimate of $818.9 million, according to Thomson Reuters I/B/E/S.
Abercrombie, which abandoned talks on a sale of its business in July after failing to find a buyer who would meet the board's valuation, said overall same-store sales rose 4 percent, beating analysts' average estimate of a 0.3 percent rise.
Excluding items, the company earned 30 cents per share, beating estimates of 22 cents.
The company forecast percentage growth of fourth-quarter comparable sales in the low-single digits and for net sales in the mid-to-high-single digits.