ANF Abercrombie and Fitch Co

Abercrombie & Fitch Co. (ANF), a specialty retailer of casual apparel, reported preliminary solid sales results for the second quarter of fiscal 2011.  The company recorded a comparable store sales growth of 9% in the quarter. The result was aided by strong performance at its existing stores including the new store in Paris.

In the quarter under review, total company direct-to-consumer net merchandise sales climbed 28% to $102.1 million and total company international net sales, including direct-to-consumer net sales, jumped 74% to $231.9 million. U.S. sales, including direct-to-consumer sales, climbed 12% to $684.9 million.

Keeping up with the increasing sales graph, total sales for the quarter shot up 23.0% to $916.8 million from $745.8 million in the same quarter last year.

Abercrombie's brand names, Abercrombie & Fitch and Hollister, delivered same-store sales growth of 5.0% and 12.0%, respectively, while its children's brand, Abercrombie Kids, witnessed an increase of 7%.

Year-to-date, Abercrombie reported a rise of 9% in comparable store sales resulting from an increase of 22% in net sales to $1,753.0 million from $1,434.0 million recorded in the prior-year period.

Year-to-date, total company direct-to-consumer net merchandise sales climbed 30% to $207.9 million and total company international net sales, including direct-to-consumer net sales, jumped 70% to $427.6 million. U.S. sales, including direct-to-consumer sales, climbed 12% to $1,326.0 million. Abercrombie's brand names, Abercrombie & Fitch and Hollister, delivered same-store sales growth of a respective 6.0% and 12.0%, while its children's brand, Abercrombie Kids, witnessed an increase of 9%.

Abercrombie operated a total of 1,073 stores. The company operated 316 Abercrombie & Fitch stores, 179 Abercrombie Kids stores, 501 Hollister Co. stores and 18 Gilly Hicks stores in the United States. The company also operated 10 Abercrombie & Fitch stores, 4 Abercrombie Kids stores, 44 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 #2 Rank, which translates into a short-term Buy rating. Our long-term recommendation on the stock remains Neutral.

 
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