Abercrombie & Fitch raises profit forecast, shares jump
(Reuters) - Teen apparel retailer Abercrombie & Fitch Co (ANF.N) raised its full-year earnings forecast, citing higher-than-expected sales in the fourth quarter to date.
Abercrombie shares rose 16 percent after the bell.
The company, which has reported seven straight quarters of declines in same-store sales, said comparable-store sales for the nine-week period ended January 4 declined 6 percent.
Chief Executive Mike Jeffries said in a statement that the company saw a "sequential improvement in comparable store sales" for the quarter to date.
Total comparable sales fell 14 percent in the third quarter.
"The 6 percent decline essentially implies that the turnaround in the domestic business is happening on an accelerated timeline versus expectations," Piper Jaffray analyst Stephanie Wissink said in an email.
"... Given the negative sentiment surrounding this company specifically, less worse is actually significantly better."
Jeffries, CEO for the past 16 years, has been heavily criticized for Abercrombie's recent dismal performance.
Abercrombie has struggled to win back teen shoppers, who are increasingly heading to "fast fashion" chains such as Inditex's (ITX.MC) Zara which offer more fashionable clothing at cheaper prices.
The company said in November that it would expand its women's tops collection, offer larger sizes and more colors, and start selling shoes, in a bid to win back teen shoppers. Abercrombie executives also had said that the retailer planned to increase average selling prices in the mid-single digit range from 2014.
Abercrombie said on Thursday it now expects earnings of $1.55-$1.65 per share for the year.
The company initially forecast full-year earnings of $3.35-$3.45 per share in February. After a series of warnings, Abercrombie in November forecast $1.40-$1.50 per share.
Analysts on average were expecting a profit of $1.47 per share, according to Thomson Reuters I/B/E/S.
Abercrombie's shares were at $38.22 in extended trading. They had closed at $33.21 on the New York Stock Exchange on Thursday.
(Editing by Maju Samuel)
- Ten countries scour sea for Malaysia jet lost in 'unprecedented mystery' |
- Shots fired in air during raid at Crimea naval base
- Missing Malaysian jet may have disintegrated in mid-air: source |
- Mexico kills drug kingpin reported dead years ago: official
- Pistorius vomits in court at Steenkamp autopsy details