Reuters

(Reuters)

Abercrombie Sales Drop on Strong Dollar, Discounts

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Teen apparel retailer Abercrombie & Fitch Co said it expects comparable sales to improve in the second half of the year as its Hollister line of clothing begins to show signs of improvement.

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Abercrombie's shares rose 3.6 percent to $20.35 in premarket trading after the company also reported a lower-than-expected fall in comparable sales for its Hollister brand in the first quarter ended May 2.

The company had said it would lower prices for its Hollister line of clothes, which includes t-shirts, skirts and apparel, in Europe. Abercrombie reported a rise in demand in Europe and Asia in the quarter.

Abercrombie, which gets nearly 37 percent of its revenue from international markets, said it expects a stronger dollar to continue eating into revenue this year.

The dollar, which had risen 1.81 percent against a basket of currencies from February to April, lowered Abercrombie's sales by about 6 percent in the latest quarter.

The company's net sales fell 14 percent in the first quarter to $709.4 million from $822.4 million a year earlier.

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Comparable sales at Hollister fell 6 percent, less than the 8.9 percent decline analysts on average had expected, according to Consensus Metrix.

Total comparable sales declined 8 percent, less than the 8.7 percent analysts had expected.

Abercrombie's net loss widened to $63.2 million, or 91 cents per share, from $23.7 million, or 32 cents per share. (Reporting by Ramkumar Iyer in Bengaluru; Editing by Joyjeet Das and Savio D'Souza)