Abercrombie & Fitch posts 1st-quarter loss even as sales climb domestically and abroad

By AP
Tuesday, May 18, 2010

Abercrombie & Fitch loses money in 1Q, sales rise

NEW ALBANY, OHIO — Abercrombie & Fitch Co. narrowed its loss in the first quarter as sales improved in the U.S. and overseas, but the retailer made less money on some sales and was hurt by higher expenses.

Abercrombie was pressured during the recession as consumers cut back, but the clothing company’s business has gained some traction after the retailer improved its fashions and lowered prices.

Abercrombie, based in New Albany, Ohio, posted a loss of $11.8 million, or 13 cents per share, for the period ended May 1. It lost $59.2 million, or 68 cents per share, a year earlier.

The performance met the expectations of analysts polled by Thomson Reuters. These estimates normally take out one-time items.

Revenue rose 14 percent to $687.8 million from $601.7 million, topping Wall Street’s expectation of $680.5 million.

Domestic sales rose 5 percent to $568.8 million, while international sales more than doubled to $119 million. Both domestic and international results include direct-to-consumer sales.

Revenue at stores open at least a year edged up 1 percent, helped by increases at both abercrombie kids and its namesake stores. Hollister Co.’s results dipped 2 percent.

Revenue at stores open at least a year is a key indicator of a retailer’s health because it measures results at existing stores rather than newly opened ones.

Gross profit slipped to 62.7 percent of revenue, from 63.4 percent, a year earlier.

Abercrombie also dealt with increased expenses. Marketing, general and administrative expenses climbed 12 percent to $96.6 million.

The company announced a quarterly cash dividend of 17.5 cents. The dividend will be paid on June 15 to shareholders of record on May 28.

The retailer anticipates boosting both its U.S. and international presence during the fiscal year. It will open Abercrombie & Fitch flagship stores in Copenhagen, Denmark and Fukuoka, Japan and a Hollister Epic store in New York. The company also confirmed plans to open about 25 international mall-based Hollister stores, one Abercrombie & Fitch store in Canada and a Gilly Hicks store in the U.K.

In the U.S., Abercrombie expects to open three of its namesake stores, two abercrombie kids stores, three Hollister stores, two Gilly Hicks stores and five outlet stores.

Abercrombie & Fitch had 1,100 stores at the end of April.

YOUR VIEW POINT
NAME : (REQUIRED)
MAIL : (REQUIRED)
will not be displayed
WEBSITE : (OPTIONAL)
YOUR
COMMENT :