NEW YORK — Propelled by surging sales in its surf-inspired Hollister division, Abercrombie & Fitch Co. reported a better-than-expected 37.7 percent jump in first-quarter profits.
The company also said Tuesday that it has established subsidiaries in both Europe and Japan, where it plans to open stores in late 2006 or 2007.
In the three months ended April 30, New Albany, Ohio-based Abercrombie earned $40.4 million, or 45 cents a diluted share, ahead of analysts' estimates for a profit of 42 cents. Comparatively, the company earned $29.3 million, or 30 cents, in last year's first quarter.
Net revenues rose 32.7 percent to $546.8 million from $411.9 million a year ago, while same-store sales in the period jumped 19 percent. By division, net sales at Abercrombie kids rose 36 percent to $63 million with comps up 32 percent; Hollister net sales increased 71 percent to $179.2 million as comps rose 21 percent, and net sales at adult Abercrombie & Fitch stores were up 16 percent at $302.1 million while comps increased 16 percent.
"I am very pleased with the improvement we have made in our organization both in merchandising where we have focused on building great strength in each category across our brands, as well as in the stores where our investment in additional staff and management hours as well as training have contributed to substantial improvements in store productivity. We believe we are well positioned for continued strong performance as the year progresses," said Mike Jeffries, chairman and chief executive officer of Abercrombie, in a statement.
Aside from plans to move into Europe, Abercrombie, as previously reported, also plans to open — and has already signed leases on — three Abercrombie & Fitch and three Hollister stores in Canada in late 2005 or early 2006. The company's 34,000-square-foot flagship on Fifth Avenue here is also slated to open in the fall of 2005.
As of April 30, Abercrombie operated 352 Abercrombie & Fitch stores, 167 Abercrombie kids stores, 260 Hollister stores and five Ruehl stores.
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