NEW YORK (
Abercrombie & Fitch
returned to profit in its second quarter, as price cuts, no doubt, bolstered sales. But these drastic discounts weighed on margins, sending shares tumbling in morning trading.
As Abercrombie & Fitch continues to focus on its international expansion, the teen retailer also said it will shutter 60 U.S. stores.
During the quarter, Abercrombie & Fitch earned $19.5 million, or 22 cents a share, compared with a loss of $26.7 million, or 9 cents, in the year-ago period. Analysts forecast a smaller profit of 16 cents a share.
Sales for Abercrombie jumped 17% to $745.8 million, better than the $727.7 million Wall Street predicted. Same-store sales grew 5%.
Gross margins were hit by a 15% drop in average ticket prices.
Abercrombie & Fitch also projects lower capital spending for the year, down to $200 million from prior outlook in the range of $200 million to $225 million.
Shares of Abercrombie & Fitch are tanking 9.6% to $34.02 in morning trading.
-- Reported by Jeanine Poggi in New York.
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