NEW YORK (AP) — Teen retailers rode a tailwind from Abercrombie & Fitch on Wednesday, with shares across the sector rising after it posted a 41 percent jump in third-quarter profit.
The surprisingly strong quarter comes ahead of a host of earnings from other retailers, including Hot Topic Inc. after the market closes, and Buckle Inc. and Wet Seal Inc. on Thursday.
All of those shares rose Wednesday even as all major indexes declined.
For the quarter ended Oct. 27, the chain earned $71.5 million, or 87 cents per share, easily beating the average prediction of analysts surveyed by FactSet of 60 cents per share.
Revenue jumped 8 percent and the company boosted its full-year profit prediction expectations.
Not surprisingly, Abercrombie posted the largest gains in the sector. Its stock soared 29 percent to $40.12 in extremely heavy morning trading, after peaking at $40.60 earlier in the day, recouping some of the losses it has posted in recent months.
Retailers have been under pressure because of higher commodity costs. The dodgy economy has also pressured sales, with many shoppers coming out only for drastic markdowns.
Since the beginning of this year, shares of Abercrombie & Fitch Co. have lost about 36 percent of their value.
Janney Capital Markets analyst Adrienne Tennant boosted her rating for Abercrombie's stock to "Buy" from "Neutral," predicting that its profitability will improve as it spends less on sales promotions in the fourth quarter and continues to shrink its inventories in relation to its sales.
Here's how shares of some other teen retailers were trading Wednesday morning amid a mixed overall market:
— Guess Inc., up 68 cents, or 3 percent, to $23.34.
— Urban Outfitters Inc., up 46 cents to $36.41, after initially jumping to $36.91 earlier in the session.
—The Gap Inc., up 33 cents to $34.02, after climbing to $34.87.
— American Eagle Outfitters, down 2 cents to $19.62, after jumping as high as $20.46.
— Rue21 Inc., up 18 cents to $28.43, after reaching $30.75.
— Express Inc., up 12 cents to $10.70, after reaching $11.02.
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