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Abercrombie profit edges up on sales increase

Teen retailer Abercrombie & Fitch Co. said Friday that its first-quarter earnings rose 3 percent from a year ago on stronger sales.
/ Source: The Associated Press

Teen retailer Abercrombie & Fitch Co. said Friday that its first-quarter earnings rose 3 percent from a year ago on stronger sales.

Abercrombie said it earned $62.1 million, or 69 cents per share, in the three months ended May 3 compared with profits of $60.1 million, or 65 cents a share, a year ago.

Sales rose 8 percent to $800.1 million from $742.4 million last year. But sales at stores open at least a year, considered a key indicator of a retailer's strength, fell 3 percent.

Analysts surveyed by Thomson Financial expected profits of 66 cents a share on sales of $810 million. The earnings estimates typically exclude one-time items.

Abercrombie shares rose 11 cents to $76.19.

The results are "pretty positive," especially in comparison to other apparel retailers, said Brady Lemos, an analyst with Morningstar. He noted that Abercrombie's stores have become particularly popular among foreign visitors to the U.S.

"They have been going to these tourist-destination stores in New York, Miami, Las Vegas. They love the dollar compared to the euro right now, and they're spending quite a bit at these stores," Lemos said.

The company's modest earnings growth also contrasted with the earnings declines posted Thursday by several department store chains. J.C. Penney Co.'s first quarter profit fell by nearly half compared to a year ago, while Kohl's Inc.'s results were down nearly 27 percent and Nordstrom Inc. reported a 24 percent decline. On Wednesday, Macy's Inc. posted a $59 million loss for the quarter.

"Despite a tough selling environment, we produced bottom-line growth while still remaining true to the aspirational positioning of our brands," Abercrombie & Fitch Chairman and CEO Mike Jeffries said in a statement.

The company on Friday reaffirmed that it expects earnings for the first half of its 2008 fiscal year to come in within a range of $1.61 to $1.65 per share, representing a 5 to 8 percent increase from a year ago. Analysts are looking for a first-half profit of $1.61 per share.

Abercrombie last week announced that it will add a second flagship store in Europe, opening a store in Copenhagen, Denmark, in 2009. Abercrombie already has a store in London and says it is securing locations for stores in Italy, France, Germany, Spain and Sweden. The company plans to open a store in Tokyo in late 2009.

Abercrombie, based in the Columbus suburb of New Albany, operates approximately 1,000 stores under the names Abercrombie & Fitch, abercrombie for children, Hollister Co., Ruehl and Gilly Hicks.

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On the Net: http://www.abercrombie.com