Abercrombie surges on earnings outlook
ANF shares jumped more than 10 percent after the clothing retailer announced better-than-expected fourth quarter sales.
By Burke Speaker
Abercrombie & Fitch (ANF) stock is up 12 percent Friday after the company announced it was raising its profit forecast.
After a clearly fruitful holiday season, the clothing retailer cited better-than-expected sales in the fourth quarter as the reason for its updated earnings expectations.
ANF raised its expectations for 2013 earnings to $1.55-$1.65 per share, compared to Wall Street estimates of $1.47, according to Thomson Reuters I/B/E/S. ANF's initial full-year forecast from early 2013 was for $3.35 per share, but that outlook sunk all the way to $1.40 to $1.50 per share as of November.
While ANF's comparable store sales declined 6 percent in the nine-week period ended Jan. 4, Chief Executive Mike Jeffries pointed out that the company is actually improving in comps so far in the current quarter.
The Street points out that this still isn't much to crow about:
"While sales were reported to be better than expected, they nonetheless represented a 4 percent decrease in the U.S. and a 10 percent decrease in international sales. Improved guidance was based on the nine-week period ending before much of the east coast freeze that is reported to have stalled mall traffic. It's unclear how nature's elements will affect future sales, as the first quarter becomes the object of focus."
Nonetheless, today's rebound could help out maligned CEO and Chairman Michael Jeffries, whose future has been put in question -- and was even named Worst CEO of 2013 by Herb Greenberg -- amid Abercrombie's stock woes. Even after today's gains, ANF remains down about 25 percent for the past 52 weeks.
Earlier this week, ANF was downgraded by Jefferies Group to a "hold."
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