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Abercrombie & Fitch Edges Profit Estimates; Outlook Below Forecasts
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Abercrombie & Fitch reported quarterly earnings on Wednesday just above analysts' expectations but issued 2007 earnings guidance below Wall Street's consensus forecast.
The apparel retailer announced second-quarter earnings of 88 cents a share on sales of $804.5 million.
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Paul Sakuma / AP Apparel retailer Abercrombie & Fitch reported quarterly earnings that beat analysts' expectations. |
] was expected to report earnings of 87 cents a share on sales of $795 million, according to analysts surveyed by Thomson Financial."I am extremely pleased with the record financial results we posted this quarter," said Abercrombie CEO Mike Jeffries, in a prepared statement. "Our success can be attributed largely to the fact that we have created a consistent business that is able to generate strong results.
"Our company is uniquely positioned, with each brand maintaining only the highest standards and supported by defined and proven processes that are continuously audited," Jeffries added.
Looking ahead, Abercrombie said it expects fiscal 2007 earnings in a range of $5.16 to $5.20 a share, which tracks below the current Thomson First Call consensus forecast of $5.24 a share.
"The low-end of the guidance reflects a flat comparable store sales scenario for the second half of fiscal 2007," the company said in a release.
The stock moved down 2% in initial after-hours trading.
Last Friday, Friedman Billings Ramsey upgraded the stock to "outperform" from "market perform", citing the company's denim offerings and brand popularity in the key back-to-school period.
"While the current macro environment for retail remains challenging, we believe that those retailers with strong brand awareness and brand equity will fare the best for back-to-school and upcoming holiday seasons," wrote analyst Adrienne Tennant, in a report sent to clients.
Tennant also raised her target price to $90 from $81, saying the company's cost structure allows for ongoing cuts.
Abercrombie's 2007 fiscal year ends in January 2008.
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