(Reuters) -Abercrombie & Fitch Inc raised its annual sales on Wednesday, banking on steady demand for its clothes and accessories even as inflation eats into household budgets.

Shares of the Ohio-based retailer were up about 20% in premarket trading.

The apparel retailer has benefited from its efforts to right-size its inventory across all its labels, attracting affluent customers to shop for a diverse range of products like dresses and cargos, as they get back to working from offices and social events.

The results come at a time when industry peers such as Lululemon Athletica Inc, Urban Outfitters Inc and American Eagle Outfitters have also seen steady demand for their product assortment and accessories.

The company now expects 2023 net sales to increase 2% to 4%, compared to previous range of 1% to 3% growth.

The company's net sales rose to about $836 million in the first quarter ended April 29, from about $812.8 million a year earlier. Analysts on average had expected $814.5 million, according to Refinitiv IBES data.

(Reporting by Granth Vanaik in Bengaluru; Editing by Maju Samuel)