Despite an "increasingly uncertain environment," Abercrombie & Fitch reports a 21% sales increase and raises its outlook.

• Wall Street's expectations were surpassed by Abercrombie & Fitch as the apparel company experienced another quarter of rapid growth.
• Although the outcomes were impressive, CEO Fran Horowitz emphasized the "growing uncertainty" as macroeconomic conditions deteriorate.
• The Hollister brand and international markets are bringing profits to the longtime mall retailer.

During its fiscal second quarter, the apparel company experienced a 21% increase in revenue, continuing its rapid growth.

Although the company experienced a 16% increase in sales in the previous year, its full-year outlook for the current year remained largely in line with estimates, as it anticipates one fewer week of sales this year compared to the previous year.

Fran Horowitz, CEO of a company that often wins in any economic environment, may be preparing for a challenging second half of the year due to the uncertain state of the economy mentioned in the company's earnings release for the first time in four quarters.

"Despite the uncertain environment, we are confident in our ability to deliver sustainable, profitable growth this year and make strategic long-term investments in marketing, digital and technology, and stores to enable future growth."

Nearly 89% of the company's shares have increased this year, but they fell about 9% in premarket trading.

According to a survey of analysts by LSEG, formerly known as Refinitiv, how Abercrombie performed compared to Wall Street's expectations.

• Earnings per share: $2.50 vs. $2.22 expected
• Revenue: $1.13 billion vs. $1.10 billion expected

In the three-month period ending August 3, the company's net income was $133 million, or $2.50 per share, which is a significant increase from the $57 million, or $1.10 per share, reported in the previous year.

The increase in sales was approximately 21%, from $935 million to $1.13 billion.

In the quarter, sales at the same store increased by 18%, due to stronger-than-anticipated summer and back-to-school promotions.

LSEG analysts had predicted an 8.9% growth in sales for the current quarter, but Abercrombie expects a higher increase of a low double digit percentage.

LSEG analysts had predicted a 12% increase in sales for Abercrombie, which is the same range that the company raised its full-year sales guidance to.

The company's fiscal 2024 will have one fewer week than fiscal 2023, which is likely weighing on its full-year guidance. Abercrombie expects the loss of one selling week will have an $80 million impact on its holiday quarter, or 5.5 percentage points. For the full year, the company expects it to hit sales by $50 million, or 1.2 percentage points.

In the past year, Abercrombie has regained prominence in the retail industry, sparking interest among investors about its ability to maintain its momentum.

Sales are being increased through the expansion of Horowitz's international markets and the growth of its Hollister and Abercrombie Kids brands.

In Q1, Hollister's sales increased by 17%, outpacing the 15% rise in comparable sales. Meanwhile, the Europe, Middle East and Africa division of the company experienced a 16% sales growth.

Abercrombie's past performance was negatively impacted by costly international expansion, but the company is adopting a new strategy for its current expansion plans.

This month, Abercrombie Kids formed a partnership with Haddad Brands, a licensor of children's wear, to expand its distribution channels and add infant and toddler categories to its product line.

Horowitz stated in a statement that as we work to diversify A&F Co.'s channel mix and drive sustainable, profitable growth, we are thrilled to partner with Haddad Brands to build on our success and create an opportunity to grow the brand in the years ahead by engaging with new customers globally.

Abercrombie Kids products will be available in Haddad Brands' showrooms worldwide next month.