Abercrombie & Fitch Q1 Earnings Fall (ANF)

Teen apparel retailer, Abercrombie & Fitch (NYSE: ANF) announced on Wednesday that its fiscal first quarter earnings dropped sharply even as same-stores sales in Europe declined due to sluggish economic conditions.

Company’s shares ended fell 13% at $39.50 on Wednesday. During afterhours trading shares sunk another 0.38%, to trade at $39.35.

On Wednesday, before the opening bell ring, Abercrombie shares were lower 5.7% as its sales grew slower than expected. The company however maintained its full-year profit guidance and expects mid-single digit decline in its same-stores sales for the remaining fiscal year.

Although Abercrombie & Fitch witnessed strong sales over the past two years, thanks mainly to growth of its international business-rising promotional pricing and increased raw material costs have challenged its bottom line and margins.

Commenting over the results, Company’s Chief Executive said to investors, “While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context.”

The Company reported a profit of $2.99 million, or 3 cents a share for the quarter ended April 28, down from $25.1 million, or 28 cents, in the same period, last year. Analysts polled by Thomson Reuters had predicted earnings of 2 cents on revenue of $952 million.

Sales jumped 10% to $921.2 million.

Meanwhile, Company’s gross margins stood at 62.6%, down from 65%.

While total U.S. sales inched up 1% to $644.3 million, International sales climbed up 42% to $277 million.

However, total same-store sales dropped by 5% for the quarter.

A closer look at same-store sales shows that Abercrombie & Fitch’s same-store sales fell 4% while Abercrombie Kids’ same-store sales dropped 11%. Same store sales for Hollister Co declined 5%.

The Company also announced increasing its existing share repurchase program by 10 million shares, raising the number of authorized shares available to 12.9 million.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.