A&F's shares surge on strong 3Q report

Associated Press Modified: November 14, 2012 at 4:45 pm •  Published: November 14, 2012
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Analysts surveyed by FactSet forecast 60 cents per share.

Revenue climbed 8 percent to $1.17 billion from $1.08 billion. Wall Street expected revenue of $1.11 billion.

Direct-to-consumer sales rose 20 percent to $158.3 million. The results include shipping and handling.

Overseas sales increased 37 percent to $351.1 million. Sales in the U.S. were about flat at $818.6 million. The international and U.S. performances include direct-to-consumer sales.

Revenue at stores open at least a year, a key indicator of a retailer's health, fell 3 percent. The figure dropped 4 percent for the Abercrombie & Fitch brand, 3 percent for abercrombie kids and 1 percent for Hollister Co. Analysts had expected an 8.7 percent drop, according to FactSet.

Revenue at stores open at least a year excludes results from stores recently opened or closed.

The company's gross profit margin — a measure of profitability — was 62.5 percent, up 2.4 percentage points from a year ago.

For the year, Abercrombie & Fitch anticipates earnings of about $2.85 to $3 per share. Its prior guidance was for earnings between $2.50 and $2.75 per share. Analysts expected earnings of $2.49 per share.

The company said its revised outlook assumes a mid-single digit percentage decline in fourth-quarter revenue at stores open at least a year.

Shares soared $10.74, or nearly 34.5 percent, to close at $41.92 Wednesday. At Tuesday's closing price, the company's stock had been down more than 30 percent since the beginning of the year and had lost more than half their value in the past 12 months.

Abercrombie & Fitch had 1,067 stores at quarter's end.