Abercrombie & Fitch (ANF) booked a stronger-than-expected 64% improvement in second-quarter profit on higher comparable sales in the U.S. and widening demand abroad, however the companys shares fell on a lackluster outlook.
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The New Albany, Ohio-based specialty apparel retailer posted net income of $32 million, or 35 cents a share, compared with $19.5 million, or 22 cents a share, in the same quarter last year.
Analysts polled by Thomson Reuters had expected on average earnings of 30 cents a share. Revenue for the three months ended July 31 was $916.8 million, up 23% from $745.8 million a year ago, beating the Streets view of $878.8 million.
U.S. sales edged 12% higher to $684.9 million during the quarter, while international revenues climbed 74% to $231.9 million. Total comparable sales, or those in stores open more than a year, jumped 9% due to gains in its Abercrombie & Fitch, Abercrombie Kids and Hollister stores.
We are pleased that our results for the quarter continued to reflect strong momentum, both in the US and Europe, resulting in a 71% increase in operating income for the quarter, the companys chief executive Mike Jeffries said in a statement.
While Abercrombie warned cost pressures will be even greater in the second half of the year with greater macroeconomic uncertainty, the company said it will remain focused on the long-term strategy and will leverage strong top-line momentum and overall performance over the last several quarters to tackle the headwinds.