Abercrombie loss widens, but Hollister remains a bright spot

Markets Associated Press

Abercrombie & Fitch Co.'s loss widened in its first quarter as revenue fell, but strong sales at its surf-inspired Hollister chain offset a continued decline at the teen retailer's namesake brand.

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The company also said it expects its results to improve in the second half of the year as it updates its advertising and shopper loyalty programs.

Shares of Abercrombie, which are already down about 49 percent in the last year, jumped more than 4 percent before the stock market opened Thursday.

Abercrombie and other teen clothing retailers have been hurt as more youngsters shop at lower-cost, fast-fashion stores H&M and Forever 21. Some rivals have filed for bankruptcy protection, including Aeropostale Inc. and Wet Seal. Abercrombie, meanwhile, has indicated that it may be up for sale, announcing earlier this month that it was it in talks with several parties about a "potential transaction."

The company has made tweaks to its fashions and advertising, but a key sales figure remains weak. The company said Thursday that sales fell 3 percent at established stores during the first quarter. Analysts expected a drop of 3.2 percent, according to FactSet. At Hollister, sales rose 3 percent at established stores, but they fell 10 percent at established Abercrombie stores.

Overall, the company reported a loss of $61.7 million, or 91 cents per share, in the three months ending April 29. In the same period a year ago, the company reported a loss of $39.6 million, or 59 cents per share.

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Losses, adjusted for pretax expenses, were 72 cents per share, matching Wall Street expectations, according to Zacks Investment Research.

Revenue fell about 4 percent to $661.1 million in the period, beating Wall Street forecasts of $653.3 million, according to Zacks.

The New Albany, Ohio-based company has about 900 Abercrombie, Hollister stores.

Shares of Abercrombie rose 53 cents to $13.42 before in premarket trading Thursday.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on ANF at https://www.zacks.com/ap/ANF

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Keywords: Abercrombie & Fitch, Earnings Report