Abercrombie & Fitch
said Tuesday its fourth-quarter earnings rose 11% -- beating Wall Street's expectations -- on strong holiday sales and demand for its early spring merchandise.
The company, which owns the Hollister and Ruehl chains, also said it plans to restate earnings in prior periods due to a review of its lease accounting methods.
The teen-clothing retailer said profit rose to $104.5 million, or $1.15 a share, for the period ended Jan. 29, from $94.5 million, or 97 cents a share, in the year-ago period. Analysts were expecting earnings of $1.13 a share, according to consensus estimates reported by Thomson First Call.
Sales rose 23% to $687.3 million, including a 6% gain at its Abercrombie & Fitch chain, and a 4% gain at the Hollister chain. The Wall Street consensus was for fourth-quarter sales of $678.9 million.
Same-store sales, those at stores open at least a year, rose 9%.
Abercrombie said its full-year net income rose 6% to $217.5 million from $205.7 million for fiscal 2003. The company repurchased 11.2 million shares for $434.7 million during the year.
Excluding the impact of accounting changes expected to go into effect in the third quarter, Abercrombie expects earnings in the range of $2.80 to $3.00 a share for fiscal 2005. Analysts are expecting earnings of $2.92 a share.
Looking ahead, the company said it will begin its international expansion with five stores in Canada this year. Ultimately, the company expects to open as many as 20 stores in Canada. It also has hired a chief executive and chief financial officer for its new European subsidiary. It expects to open its first stores in Europe at the end of 2006.
Its shares were recently down 30 cents, or 0.5%, to $54 in after-hours trading. During the regular trading session Tuesday, the stock lost 48 cents, or 0.9%, to $54.30.