Abercrombie & Fitch shares jumped on Wednesday, despite the fashion retailer posting mixed first-quarter results and issuing weaker-than-expected guidance after conflict in the Middle East hit demand.

The US apparel group said sales across its Europe, Middle East and Africa region fell 10 per cent during the quarter, with the slowdown driven by weaker demand at its Hollister brand as the conflict escalated.

Finance chief Robert Ball told analysts the disruption reduced total company net sales growth by more than half a percentage point compared with the retailer’s outlook.

Despite the regional pressure, Abercrombie shares rose around 12 per cent in afternoon trading after the business beat Wall Street earnings expectations.

Chief executive Fran Horowitz said the company was focused on areas within its control, including inventory levels and marketing investment, to ensure it could respond to trading conditions in real time.

“Despite these EMEA headwinds, we expect total sales growth for the second quarter, along with full-year 2026, which would be our fourth consecutive year of net sales growth,” she said.

Abercrombie reported earnings per share of $1.47 for the quarter, ahead of analyst expectations of $1.28, according to LSEG. However, revenue came in slightly below forecasts at $1.11bn, compared with expectations of $1.12bn.

Net income for the three months to 2 May fell to $67.1m, or $1.47 per share, compared with $80.4m, or $1.59 per share, a year earlier.

Sales increased around two per cent year on year to $1.11bn, up from $1.10bn. However, Ball said the rise was not driven by organic consumer demand, but by new store openings and favourable foreign exchange movements.

The EMEA region represents around 15 per cent of Abercrombie’s total company sales.

For the current quarter, the retailer expects earnings per share of between $1.80 and $2, well below analyst expectations of $2.54.

However, Abercrombie reaffirmed its full-year guidance, with net sales expected to rise between 3 per cent and 5 per cent across fiscal 2026. It continues to expect full-year earnings per share of between $10.20 and $11.

Ball said easier comparisons with last year’s results and lower marketing spend were among the factors expected to support the business in the second half, rather than a clear improvement in demand.

He added that tariffs and freight costs were expected to be “slight headwinds” by the end of the year.

Abercrombie now expects tariffs to hit profitability by 0.2 percentage points in fiscal 2026, compared with its previous estimate of around 0.7 percentage points.

The company said it had applied for a tariff refund of around $100m, though this has not been factored into its outlook.