(Replaces 6th paragraph to reflect old accounting methods and
corrects EPS comparison in 7th paragraph)
Feb 22 Abercrombie & Fitch Co reported a
drop in fourth-quarter comparable sales on Friday as the youth
fashion retailer continued to struggle overseas and its
Hollister chain showed weakness during the holiday period.
The company forecast profit below Wall Street expectations,
but the latest quarterly earnings topped estimates. The retailer
also boosted its dividend.
Sales at stores open at least a year and online fell 1
percent. They were flat for the namesake chain and fell 2
percent at Hollister. They were little changed in the United
States and down 3 percent abroad.
Overall sales rose 10.5 percent to $1.47 billion for the 14
weeks ended Feb. 2, boosted by an extra week compared to the
year earlier period. The result was below the $1.49 billion Wall
Street was projecting, according to Thomson Reuters I/B/E/S.
Despite continued sluggish sales, Abercrombie's profit was
lifted by a decrease in product costs, sending its gross profit
margin up 3.9 percentage points to 63.4 percent of sales.
Under an old accounting method for inventory, the company
earned $173.2 million, or $2.15 per share, for the 14-week
period, compared with $19.6 million, or 22 cents per share, a
year earlier for a 13-week period. Abercrombie announced a
change in accounting for inventory that will be marked down
Excluding an impairment charge, Abercrombie had a profit of
$2.21 a share, 25 cents better than expected, according to
Thomson Reuters I/B/E/S.
The company raised its quarterly dividend to 20 cents per
share from 17.5 cents.
For the fiscal year that began at the start of February,
Abercrombie projected earnings of $3.35 to $3.45 a share for
fiscal 2013, below estimates of $3.63.
(Reporting by Phil Wahba in New York and Maria Ajit Thomas in
Bangalore; Editing by Jeffrey Benkoe)