(Reuters) – Abercrombie & Fitch Co (N:) reported a surprise profit on Thursday as the apparel retailer slashed costs and benefited from a surge in online orders during the COVID-19 pandemic, sending its shares 9% higher in premarket trading.
With customers staying at home due to the health crisis, the company’s digital sales soared 56% in the second quarter.
Abercrombie, which has furloughed employees and cut executive pay to reduce costs, said store and distribution expenses were down nearly 18%, while marketing costs fell 16%.
Net income attributable to the company was $5.5 million, or 9 cents per share, compared with a loss of $31.1 million, or 48 cents per share, a year earlier. The year-ago quarter included flagship store exit charges of about $45 million.
Excluding items, the company earned a profit of 23 cents per share in the period, while analysts were expecting a loss of 83 cents per share, according to IBES data from Refinitiv.
Net sales fell to $698.3 million in the quarter ended Aug. 1, but beat estimates of $658.44 million.
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