Zscaler plunges 31% on cautious guidance as Abercrombie & Fitch beats earnings

Zscaler shares fell 31% in trading on Wednesday following the release of cautious forward guidance, underscoring continued volatility within the technology sector. The sharp decline highlights the market’s sensitivity to future outlooks even as broader earnings season winds down. With nearly all first-quarter reports now in the rearview mirror, S&P 500 companies have largely delivered solid results and printed profits, positioning the index on track for double-digit earnings growth despite ongoing geopolitical risks.

In contrast to the tech selloff, Abercrombie & Fitch stock rose nearly 12% after reporting adjusted earnings per share of $1.47, surpassing analyst estimates of $1.29 by $0.18. The retailer posted revenue of $1.1 billion, which was slightly below the $1.12 billion consensus estimate but represented a 2% increase from the prior year period. The company achieved an operating margin of 8.0%, with comparable sales declining just 1%.

Regional performance for the apparel retailer was mixed, driven by divergent global demand patterns. Americas net sales rose 3%, while APAC surged 24%, offsetting a 10% decline in EMEA where demand softened amid the Middle East conflict. By brand, Abercrombie grew 3% compared to last year, while Hollister remained flat.

CEO Fran Horowitz highlighted the company’s operational discipline, citing record first-quarter net sales and its 14th consecutive quarter of growth. “Our bottom-line results reflect discipline and consistency, with both operating margin and earnings per diluted share exceeding our outlook,” Horowitz said, noting the team’s consistent execution for customers amid a dynamic global environment.

This week’s earnings calendar includes further updates from major computer hardware, software, and retail companies, including Marvell Technology, Salesforce, Costco Wholesale, and Dell Technologies. The results from Zscaler and Abercrombie & Fitch provide a snapshot of the divergent trends shaping investor sentiment as the quarter concludes.