(By Balachander) Abercrombie & Fitch Co. (NYSE:ANF) posted quarterly earnings that halved from the year-ago period amid a drop in comparable store sales and contraction of margins and the apparel retailer backed its guidance for 2012. Profit topped market expectations, while sales missed consensus.
The New Albany, Ohio-based company said it saw a further deceleration in the trend in its international stores, while its U.S. chain stores also comped negatively for the quarter for the first time since 2009.
ANF earned $15.5 million or $0.19 per share in the second quarter, compared with $32.0 million or $0.35 per share in the comparable quarter of the previous year. Wall Street analysts' projected the company to earn 17 cents a share.
Net sales rose 4 percent to $951.4 million, yet missed consensus estimate of a growth of 8.40 percent. U.S. sales declined 5 percent, while international sales jumped 31 percent.
Comparable store sales dropped 10 percent. By brand, comparable store sales declined 4 percent for Abercrombie & Fitch, 10 percent for abercrombie kids, and 10 percent for Hollister Co, the company said.
Gross profit rate contracted 110 basis points to 62.5 percent.
Looking forward for the full year, ANF continues to forecast earnings per share of about $2.50 to $2.75, on a 10 percent decrease in comparable store sales for the second half of the year. It still expects substantial recovery of the gross margin rate erosion seen in 2011.
The company declared a quarterly cash dividend of $0.175 per share on the Class A common stock, payable on September 11,to shareholders of record at the close of business on August 27. It also boosted share buyback authorization by ten million shares.
ANF closed Tuesday's regular trading session at $32.33. The stock has been trading in the 52-week range between $28.64 and $77.49.