Abercrombie & Fitch Co.'s (ANF) fiscal second-quarter
earnings rose 64% as the teen-apparel retailer's sales continued to
soar, though rising costs hurt margins.
"Costing pressures will be greater in the second half of the
year, and macroeconomic uncertainty has increased," said Chairman
and Chief Executive Mike Jeffries. "However, our strong top-line
momentum and overall performance for the past several quarters give
us confidence that we are well positioned to navigate through this
environment."
Abercrombie & Fitch has seen strong results of late, aided
by more promotional pricing and the growth of its international
business. But like other clothing retailers, the company has said
higher prices are on the way because of increased raw material
costs.
For the quarter ended July 30, the company reported a profit of
$32 million, or 35 cents a share, up from $19.5 million, or 22
cents, a year earlier. Analysts polled by Thomson Reuters had most
recently forecast earnings of 30 cents.
Gross margin fell to 63.6% from 65.1%, reflecting a 28% jump in
the cost of goods.
Earlier this month, the company said total sales jumped 23% to
$916.8 million, while same-store sales rose 9%. By brand,
same-store sales increased 5% for Abercrombie & Fitch, 7% for
abercrombie kids, and 12% for Hollister Co. U.S. sales rose 12% to
$684.9 million, international sales jumped 74% to $231.9 million
and direct-to-consumer sales grew 28% to $102.1 million.
Shares closed Tuesday at $71.02 and were inactive premarket. The
stock has more than doubled over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com