Abercrombie & Fitch Tops Q2 Views, Shares Surge

Shares of Abercrombie & Fitch Co. ANF jumped 16 percent in pre-market trading after the company reported upbeat results for the second quarter on Wednesday. The New Albany, Ohio-based company posted a quarterly net loss of $0.8 million, or $0.01 per share, versus a year-ago profit of $12.9 million, or $0.17 per share. Excluding certain items, Abercrombie & Fitch's earnings came in at $0.12 per share in the latest quarter, versus net income of $0.19 per share in the year-ago quarter. Its sales declined 8 percent to $817.8 million. However, analysts were projecting a loss of $0.04 per share on revenue of $811.5 million. The average estimate among 21 Estimize users was for a loss of $0.09 per share and revenue of $795.06 million. For the second quarter, net sales dropped 9 percent to $380.6 million for Abercrombie, while sales declined 6 percent to $437.1 million for Hollister. Net sales slipped 6 percent to $514.5 million in the U.S., while sales shrank 12 percent to $303.2 million internationally. Its same-store sales slipped 4 percent in the quarter. The gross profit rate increased 20 basis points to 62.3 percent in the latest quarter. Marketing, general and administrative expense surged to $119.8 million from $111.0 million. Abercrombie & Fitch ended the quarter with $478.6 million in inventory, a 13 percent drop from last year. Arthur Martinez, Executive Chairman, said, "In our second quarter, we delivered a meaningful sequential improvement in comparable sales, stabilized gross margins and achieved significant expense reductions. Our results exceeded what we signaled in our first quarter earnings call and give us confidence that we are on the right track, although we recognize that we still have much to achieve." Abercrombie & Fitch shares jumped 16.04 percent to $20.04 in pre-market trading.