Abercrombie & Fitch Q2 Profit Rises, Revenue Misses View

(RTTNews) - Teen clothing retailer Abercrombie & Fitch Co. (ANF) Thursday reported increased profit for the second quarter, but sales declined and missed expectations. The stock dropped more than 5 percent in pre-market activity.

Net income rose to $12.88 million or $0.17 per share from $11.37 million or $0.14 per share in the prior year. Excluding certain charges, net income per share was $0.19 while it totaled $0.16 last year.

On average, 35 analysts polled by Thomson Reuters expected earnings of $0.11 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales declined to $890.61 million from $945.7 million in the prior year. Analysts expected revenues of $909.22 million.

Comparable sales fell 7 percent with an 11 percent drop in Stores and an 11 percent rise in the Direct-to-Consumer format.

Sales in the U.S. fell 9 percent to $546 million, with a 5 percent drop in comparable sales.

International sales edged down 1 percent to $345 million and international comparable sales fell 9 percent.

Gross profit fell 180 basis points to 62.1 percent, reflecting an increase in promotional activity.

Mike Jeffries, CEO, said, "In a continued challenging environment, our sales for the second quarter were somewhat below plan, but we have seen modest improvement since the Back-to-School floorset."

Looking ahead, the company continues to expect full year earnings per share in the range of $2.15 to $2.35, based on the assumption that full year comparable sales will be down by a mid-single-digit percentage.

The guidance issued in May projected full year comparable sales in the range of down three to four percent. Analysts expect full year earnings of $2.36 per share.

ANF, which closed down 1.4 percent on Wednesday at $44.20, fell 5.3 percent in pre-market activity.