Shoppers walk past a billboard for a new Abercrombie & Fitch store in Singapore in August.(Photo: Wong Maye-E AP)
NEW ALBANY, Ohio -- Abercrombie & Fitch's net income rose 41%
in its fiscal third quarter as international and direct-to-consumer
The clothing company's results easily beat Wall Street's expectations and the chain raised its full-year earnings forecast.
strong quarterly performance is welcome news, as Abercrombie &
Fitch has been struggling to sell its preppy jeans and T-shirts at a
time when fashion trends are shifting and a rough economy has left teens
around the world on tighter budgets.
The company's stock, which
closed at a little over $31 on Tuesday, is down more than 30% since the
beginning of the year. The shares have lost more than half their value
in the past 12 months.
But in premarket trading on Wednesday, its shares jumped $9.24, or 29.6%, to $40.42.
& Fitch has been working to fix its problems. The company cut
prices during the recession. It also disclosed in August that it will
put a hold on opening any additional flagship stores and scale back on
the number of locations it opens abroad, in part to prevent stores in
international markets from cannibalizing sales from each other.
& Fitch Co. announced in June that it was closing 180 U.S. stores
over the next few years. The New Albany, Ohio-based chain had already
closed 135 underperforming U.S. stores in two years.
period ended Oct. 27, the chain reported net income of $71.5 million, or
87 cents per share, compared with $50.9 million, or 57 cents per share,
a year earlier.
Analysts surveyed by FactSet forecast 60 cents per share.
Revenue climbed 8% to $1.17 billion from $1.08 billion. Wall Street expected revenue of $1.11 billion.
Direct-to-consumer sales rose 20% to $158.3 million. The results include shipping and handling.
sales increased 37% to $351.1 million. Sales in the U.S. were about
flat at $818.6 million. The international and U.S. performances include
Revenue at stores open at least a year, a
key indicator of a retailer's health, fell 3%. The figure dropped 4%
for the Abercrombie & Fitch brand, 3% for abercrombie kids and 1%
for Hollister Co.
Revenue at stores open at least a year excludes results from stores recently opened or closed.
the year, Abercrombie & Fitch now anticipates earnings of about
$2.85 to $3 per share. Its prior guidance was for earnings between $2.50
and $2.75 per share. Analysts expected earnings of $2.49 per share.
company said its revised outlook assumes a mid-single digit%age decline
in fourth-quarter revenue at stores open at least a year.
Abercrombie & Fitch had 1,067 stores at quarter's end.