Warning: ob_start() [ref.outcontrol]: output handler 'ob_gzhandler' conflicts with 'zlib output compression' in /home/cyberj/public_html/forums/header.php on line 606
Jazz Forums - Abercrombie 1Q profit tumbles on higher costs
Jazz Forums
Last active: Never
Not logged in [Login - Register]
Go To Bottom


Printable Version | Subscribe | Add to Favourites   Post new thread Poll:
Author: Subject: Abercrombie 1Q profit tumbles on higher costs
koko42
Junior Member
**




Posts: 12
Registered: 25-5-1212
Member Is Offline


[*] posted on 25-5-1212 at 03:17 Reply With Quote
Abercrombie 1Q profit tumbles on higher costs



Abercrombie and Fitch Co. said Wednesday its first-quarter net income shrank 88 percent because of higher costs and declining sales in established stores and in Europe. The teen retailer's shares sank 12 percent to a new 52-week low in morning trading.

For the quarter ended April 28, the New Albany, Ohio-based retailer earned $3 million, or 3 cents per share, down from $25.1 million, or 28 cents per share, a year ago. Analysts polled by FactSet expected a profit of 2 cents per share.

Revenue rose 10 percent to $921.2 million from $836.7 million, but fell short of average analysts' predictions of $951.1 million.

U.S. revenue rose 1 percent to $644.3 million, while international revenue jumped 42 percent to $277 million. Revenue for sales that went straight to shoppers, such as sales from the company's websites, rose 40 percent to $148.2 million.

But revenue at stores open at least a year fell 5 percent, with a 4 percent drop at the company's namesake stores, an 11 percent decline at cheap Abercrombie and Fitch kids stores and a 5 percent drop at Hollister stores. The metric is a key measure of a retailer's health, because it excludes sales at stores open at least a year.

Abercrombie CEO Mike Jeffries said that European sales trends were "challenging" because of the ongoing debt crisis in the region and recession in several European countries.

For the year ended Jan. 28, Europe accounted for about 20 percent of Abercrombie's total sales, according to the company's annual report. But in the first quarter of this year, the company opened a flagship Abercrombie & Fitch store in Hamburg, Germany, and six Abercrombie and Fitch Hollister stores across Europe.

Later this year, the company plans to open at least three more flagship stores across Europe, along with additional Abercrombie and Fitch Hollister outlet stores.

The company's costs also climbed, rising 18 percent to $344.9 million to make its clothes, 14 percent for store and distribution expenses and up 9 percent for marketing and general expenses.

Abercrombie and Fitch sale said that based on weaker first-quarter sales, it expects 2012 revenue at stores open at least a year to fall by a mid-single digit percentage -- a decline under 10 percent. Still, the company backed its full-year profit prediction of $3.50 to $3.75, saying that it expects to make up for lower revenue by being more profitable and posting lower expenses. Abercrombie said that it expects the higher costs for cotton that have dinged results recently are largely behind it, and it expects to grow earnings in the second half of the year

The company also predicts fewer shares outstanding, which give a lift to earnings per share. Abercrombie on Wednesday said it has increased the number of shares it can buy back by 10 million.

Analysts polled by FactSet expect a full-year profit of $3.57 per share for the year ending in January 2013.

Abercrombie and Fitch outlet shares dropped $5.52, or 12 percent, to $39.88 in morning trading, after tumbling as low as $39.49 earlier in the session and passing their previous 52-week low of $40.25. The drop marked the company's lowest price since the fall of 2010.




View User's Profile Visit User's Homepage View All Posts By User U2U Member
Post new thread Poll:


Go To Top


Copyright 2006 Cyberjaz - All Rights Reserved


[queries: 15]
[PHP: 85.6% - SQL: 14.4%]