(Adds details throughout, adds CEO quote and analyst quote, updates share price)
Nov 29 (Reuters) - U.S. teen apparel retailer Abercrombie & Fitch Co forecast same-store sales for the holiday quarter above analysts’ estimates on Thursday, driven by strong sales at its Hollister and flagship stores, sending its shares soaring 24 percent in early trading.
“We saw a solid start to the holiday season in November, with strong double-digit growth on Singles Day on Tmall, and a record performance over the peak Holiday period from Thanksgiving Day through Cyber Monday,” Chief Executive Officer Fran Horowitz said on a call with investors.
Tmall is Alibaba’s giant online marketplace.
Horowitz emphasized the steep investments the company has made in better managing its supply chain and product assortment to serve customers faster.
Abercrombie has changed its namesake fashion brand in recent years, doing away with risque advertising and logo-emblazoned apparel, which fell out of fashion in the late 2000s. It has relied on Hollister to generate the majority of its revenue as its denim and Gilly Hicks intimates collections prove to be a hit with younger customers.
The New Albany, Ohio-based retailer now expects to close fewer stores in the current year based on improved performance and successful lease renegotiations. It anticipates closing up to 40 stores by year-end, primarily in the United States, down from its previous expectation of closing up to 60 stores.
Ken Perkins, founder of research firm Retail Metrics, said the company was well-positioned for a strong holiday but Abercrombie’s namesake brand has some work to do to resonate with shoppers.
The company promoted the head of Hollister, Kristin Scott, to a newly created position of Global Brands president. Stacia Andersen, brand president of Abercrombie & Fitch, would be leaving the company, it said.
The apparel retailer said it expected fourth-quarter same store sales to rise in the low single digits. Analysts had expected an increase of 0.6 percent.
Sales at established stores rose 3 percent in the third quarter ended Nov. 3, well above an increase of 1.6 percent estimated by analysts, according to IBES data from Refinitiv.
Net income rose to $23.9 million, or 35 cents per share, from $10.1 million, or 15 cents per share, a year earlier.
Excluding one-time items, the company earned 33 cents per share, while net sales rose 0.2 percent to $861.2 mln.
Analysts, on average, expected adjusted earnings of 20 cents per share on revenue of $853 million. (Reporting by Uday Sampath in Bengaluru and Melissa Fares in New York; Editing by Anil D’Silva and Nick Zieminski)