Abercrombie & Fitch Profit Beats Estimates
Teen apparel retailer Abercrombie & Fitch reported higher quarterly profit Friday, helped by stronger sales in all its chains and better gross profit.
The seller of casual clothes like jeans and T-shirts for teens said net profit increased to $62.1 million, or 69 cents per share, in the first quarter ended on May 3, from $60.1 million, or 65 cents per share, in the year-ago period.
The gross profit rate was 66.8 percent, up 120 basis points from last year, as higher initial markups and a lower rate of lost merchandise offset deeper markdowns, which were needed to lure cash-strapped US consumers to spend in a weak economy.
Sales at stores open at least a year, the key retail gauge known as same-store sales, fell 3 percent. Net sales were up 8 percent to $800.2 million.
The New Albany, Ohio-based company operates Abercrombie & Fitch , Hollister, abercrombie and RUEHL stores and recently opened the first store in its Gilly Hicks underwear chain.
The retailer reaffirmed its earnings outlook, saying it still expects net income for the first half of fiscal 2008 to range from $1.61 to $1.65 per share. The low end of that range reflects a 2 percent decline in same-store sales for the current quarter, it said.