Abercrombie & Fitch Shares Tumble On Weak Outlook

Published February 2, 2012 2:36PM (EST)

NEW ALBANY, Ohio (AP) — Shares of Abercrombie & Fitch tumbled 11 percent to a 52-week low in early trading Thursday after the retailer said that its fourth-quarter adjusted earnings and revenue will likely disappoint Wall Street.

The company, based in New Albany, Ohio, cited higher markdowns and increased cotton costs.

Abercrombie & Fitch said that was forced to slash prices to get consumers into its stores in a highly competitive market.

The company anticipates fourth-quarter adjusted earnings of about $1.10 to $1.15 per share. That's well below expectations of $1.55, according to a poll of analysts by FactSet.

Fourth-quarter revenue climbed 16 percent to $1.33 billion, but the results missed Wall Street's $1.37 billion estimate.

Sales in the U.S. rose 4 percent to $962.2 million, including including direct-to-consumer sales. Overseas, revenue for the period ended Jan. 28 surged 62 percent to $366.6 million.

Direct-to-consumer sales for the company, including shipping and handling, increased 41 percent to $212.3 million.

Fourth-quarter revenue at stores open at least a year was flat compared with a year ago. The retailer of preppy teen clothing said that the performance was below its expectations mostly due to weaker-than-expected sales in the U.S.

The figure is a key indicator of a retailer's health because it excludes results volatility from stores recently opened or closed.

Abercrombie & Fitch will report its fourth-quarter financial results on Feb. 15.

For 2012, the retailer foresees earnings between $3.50 and $3.75 per share. This assumes revenue at stores open at least a year are flat.

Analysts were looking for full-year earnings of $4.21 per share.

Abercrombie & Fitch Co. slid $5.39 to $41.44 in morning trading.


By Salon Staff

MORE FROM Salon Staff


Related Topics ------------------------------------------