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Abercrombie & Fitch

(ANF) - Get Abercrombie & Fitch Company Report

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.

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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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