Abercrombie & Fitch Co ( ANF ) shares are trading higher after the company reported better-than-expected first-quarter FY24 earnings and raised guidance.

The company reported first-quarter FY24 sales growth of 22% year-on-year to $1.02 billion, beating the analyst consensus estimate of $ 963.26 million.

Comparable sales jumped 21%. Adjusted EPS of $2.14 beat the analyst consensus estimate of $1.73.

Americas sales increased 23% Y/Y, EMEA grew 19% and APAC sales climbed 10%. Abercrombie brand sales rose 31%, while Hollister sales climbed 12%.

Gross profit margin expanded 540 basis points to 66.4%. Operating income for the quarter was $130 million versus $34 million a year ago, with a margin of 12.7%.

Operating expense, excluding other operating income, net, of $549.6 million for the quarter, decreased to 53.8% of sales from 57.3% the prior year.

The company held $864 million in cash and equivalents as of May 4. The operating cash flow for the quarter was $95 million.

Inventories were $449 million, compared to $469 million and $448 million as of February 3, 2024 and April 29, 2023, respectively.

“We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations,” said CEO Fran Horowitz.

Outlook: Abercrombie & Fitch ( ANF ) raised its FY24 net sales growth outlook from 4% – 6% to a growth of 10%.

ANF raised FY24 operating margin outlook from 12% to be around 14%. Capital expenditure of about $170 million.

For the second quarter, ANF sees sales growth to be up mid-teens compared to the fiscal second quarter 2023 level of $935 million.

Price Action: ANF shares are trading higher by 5% at $160.00 in premarket at the last check Wednesday.