ANF Abercrombie and Fitch Co

Abercrombie & Fitch Co. (ANF), a specialty retailer of casual apparel, reported preliminary solid sales results for the first quarter of fiscal 2011.  The company recorded a comparable store sales growth of 10% in the quarter. The result was aided by a late Easter holiday in the month of April.

In the quarter under review, total company direct-to-consumer net merchandise sales climbed 32% to $105.8 million and total company international net sales, including direct-to-consumer net sales, jumped 64% to $195.7 million. U.S. sales, including direct-to-consumer sales, climbed 13% to $641.0 million

Abercrombie’s brand names, Abercrombie & Fitch and Hollister, delivered same-store sales growth of a respective 8.0% and 11.0%, while its children’s brand, Abercrombie Kids, witnessed an 11% increase.

Keeping up with the increasing sales graph, total sales for the quarter shot up 22.0% to $836.7 million from $687.8 million in the same quarter last year.

The Zacks Consensus Estimate for the first quarter of fiscal 2011 is currently pegged at 4 cents a share, which increased by 1 cent over the past 30 days.

Abercrombie operated a total of 1,071 stores. The company operated 316 Abercrombie & Fitch stores, 181 Abercrombie Kids stores, 502 Hollister Co. stores and 18 Gilly Hicks stores in the United States. The company also operated 9 Abercrombie & Fitch stores, 4 Abercrombie Kids stores, 40 Hollister Co. and 1 Gilly Hicks store internationally. 

Abercrombie operates in a highly fragmented market and competes with national as well as regional players. Furthermore, apart from competing with larger retailers such as Gap Inc. (GPS), Abercrombie is facing increasing competition from value-priced specialty retailers such as Aeropostale Inc. (ARO).

Abercrombie’s shares maintain a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.

 
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