Abercrombie & Fitch 3Q profit up, tops Street view
NEW ALBANY, Ohio (AP) — Abercrombie & Fitch's net income rose 41 percent in its fiscal third quarter as international and direct-to-consumer sales strengthened. The clothing company's results easily beat Wall Street's expectations and the chain raised its full-year earnings forecast. Its shares surged in premarket trading.
The 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 percent 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 percent, to $40.42.
Abercrombie & 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.
Abercrombie & 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.
For the 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.
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