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Abercrombie & Fitch Shares Tumble on Profit Decline

Shares fall 19 percent in pre-market trading.

Shares of Abercrombie & Fitch Co. fell more than 19 percent in pre-market trading Thursday, after the teen apparel retailer posted a 33.3 percent decline in second-quarter income.
 
The company also provided a weaker-than-expected third-quarter outlook.
 
For the period ended August 3, net income totaled $11.4 million, or 14 cents a diluted share compared with year-ago income of $17.1million, or 20 cents a share.

Stripping out 2 cents a share connected to its profit-improvement plans, earnings were 16 cents a share.
 
Net sales slid 0.6 percent to $945.7 million from $951.4 million, a year earlier.

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Analysts were looking for EPS of 28 cents on sales of $996.2 million.
 
“The second quarter was more difficult than expected due to weaker traffic and continued softness in the female business, consistent with what others have reported,” said chairman and chief executive officer Mike Jeffries. “In that context we are planning sales, inventory and expenses conservatively for the remainder of the year.”
 
The ceo said the company was nearing completion of its long-term strategic review, but noted that there is still much uncertainty in terms of traffic trends.
 
As a result, Abercrombie said it expects third-quarter EPS of between 40 cents and 50 cents, lower than Wall Street’s estimate of $1.06 a share.

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