U.S. News

Abercrombie & Fitch Quarterly Profit Up 20%, Meets Forecast


Mall-based retailer Abercrombie & Fitchsaid on Wednesday that fourth quarter net income rose by 20%, matching Wall Street estimates, helped by strong sales in its surf-inspired Hollister chain.

But a first-quarter forecast was lower than analysts' expectations, and shares fell 2.5% in extended trade.

Net income in the fourth quarter rose to $198.2 million, or $2.14 a share, from $164.6 million, or $1.80 a share, a year earlier. The latest results match a consensus estimate compiled by Thomson Financial.

Net sales beat the billion dollar mark, rising 18% to $1.14 billion, said the company, whose chains include its namesake stores popular with college-age youth and teens, surf-inspired Hollister and children's store Abercrombie. Sales were slightly above average analysts' estimate of $1.13 billion.

The fourth quarter of fiscal 2006 included an extra week.

At Hollister, net sales rose 33%. Sales at Abercrombie & Fitch's namesake stores saw a sales rise of 6%. Sales rose 19% at Abercrombie, the company said.

Looking to the first half of 2007, Abercrombie said it expects earnings to range between $1.47 and $1.52 a share, representing earnings growth of between 10% and 13%.

But in the first quarter, the company expects earnings growth in the mid-single digits due in part to pre-opening store costs for its London flagship store.

Analysts, on average, have been expecting Abercrombie to post first-quarter earnings of 69 cents, representing an 11% rise over year-ago results.