NEW YORK — Teen retailer Abercrombie & Fitch matched Wall Street’s estimates and just squeaked by its own expectations late Tuesday with a profit increase that nearly achieved double-digit status.
This story first appeared in the May 14, 2003 issue of WWD. Subscribe Today.
However, the firm said the retail environment remains uncertain and the current, second-quarter’s earnings could fall short of the current expectations of Wall Street analysts.
For the three months ended May 3, the New Albany, Ohio-based casual apparel retailer’s profits escalated 9.7 percent to $25.6 million, or 26 cents a diluted share, versus income of $23.3 million, or 23 cents, in the year-ago period, matching Wall Street’s best guess. Sales for the quarter rose 10.8 percent to $346.7 million over $312.8 million, but decreased 6 percent on a comp basis.
Noting April’s business was less buoyant than expected, Michael Jeffries, chairman and chief executive, said: “We are responding by continuing to put out the best possible fashion for our customers and managing the business very conservatively.”
At A&F stores, women’s apparel comps were positive, with bottoms, particularly in military styles, being top sellers, followed by skirts and shorts. In addition, revealing feminine tops are performing well.
Hollister stores continue to yield positive results as the division reported a double-digit comp increase in both its young men’s and women’s divisions. For the first time, sales per square foot exceeded those at A&F stores in the same malls. The company is so enamored with the 95-unit division that it plans to open 80 doors this year and another 80 in 2004.
Although A&F reported a comp decline in each month of the first quarter, the company said it was less promotional this year, which resulted in higher average unit retail prices and healthier gross margins.
A&F, which operates 602 stores under the A&F and Hollister nameplates, said it is anticipating it can earn between 30 and 34 cents a diluted share in the second quarter, which falls below current analysts’ expectations of 35 cents, according to First Call.