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Abercrombie & Fitch (ANF) Q4 Earnings Top Street, U.S. Comps Flat

 February 22, 2013 07:35 AM

Specialty retailer Abercrombie & Fitch Co. (NYSE: ANF) posted an increase in quarterly earnings as sales and margins rose. Earnings topped Wall Street expectations, while top-line was slightly below consensus.

The company declared a quarterly cash dividend at the increased rate of $0.20 per share on the Class A Common Stock payable on March 19, 2013 to shareholders of record at the close of business on March 4, 2013.

On a non-GAAP basis under the retail method, earnings per share (EPS) nearly doubled to $2.21 from $1.12, topping market expectations of $1.96 for the fourth quarter.

[Related -Abercrombie & Fitch Co. (ANF) Q3 Earnings Preview: A Cold November Rain?]

GAAP earnings were $157.2 million, compared with a restated $45.8 million in the comparable period of last year.

Sales rose 11 percent to $1.47 billion, versus consensus estimate of $1.49 billion.

"Despite a challenging U.S. retail environment over the holiday period, our core U.S. chain plus DTC comparable sales remained positive and we saw continued sequential improvement in our international business," commented CEO Mike Jeffries.

Including direct-to-consumer sales, total U.S. sales grew 1 percent. Total international sales jumped 34 percent. Total Company direct-to-consumer sales, including shipping and handling, rose 26 percent. Total comparable sales fell 1 percent with comps decling 4 percent and comparable direct to consumer sales growing 17 percent.

[Related -Abercrombie & Fitch Co (ANF): Lack Of Visibility May Keep Investors On Sidelines]

Comparable sales were flat for the U.S., with comps down 1 percent. International comps dropped 14 percent.

By brand, comps were flat for Abercrombie & Fitch, up 4 percent for abercrombie kids, and down 2 percent for Hollister Co.

Gross margin under the retail method jumped 920 basis points to 65.3 percent due to fall in average unit cost and the effect of higher markdowns on carryover inventory in last year.

Looking ahead into the fiscal 2013, the company expects EPS in the range of $3.35 to $3.45 under the cost method of accounting for inventory, while Wall Street analysts expect $3.63.

Abercrombie expects to close roughly 40-50 stores in the U.S. during 2013, mainly through natural lease expirations.

ANF closed Thursday's regular session down 3.52 percent at $49.05. The stock has been trading between $28.64 and $54.10 for the past 52 weeks.



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