Abercrombie Sustains Momentum – Analyst Blog

Abercrombie & Fitch Co. (ANF), a specialty retailer of casual apparel, reported impressive sales results for the five-week period ended October 2, 2010. The company’s comparable-store sales for September 2010 jumped 13.0%, following an increase of 6.0% in August and 7.0% in July. 

 

In its brands, Abercrombie delivered comparable-store sales growth of 13.0% in Abercrombie & Fitch, 24.0% in Abercrombie Kids and 9.0% in Hollister.

   


In keeping with its sales streak, the company recorded a sales growth of 25.0% to $305.3 million from $244.0 million in the same month last year. Abercrombie had registered a growth of 14.0% in August 2010.

 

Year-to-date, comparable-store sales climbed 5.0% with total sales growth of $17.0% to $2.09 billion compared with $1.79 billion in the year-ago period.

 

Abercrombie operates a total of 1,104 stores, of which 340 are Abercrombie & Fitch stores, 203 are Abercrombie Kids stores, 510 are Hollister Co. stores and 17 are Gilly Hicks stores, located in the United States. In addition, the company also operates seven Abercrombie & Fitch stores, four Abercrombie Kids stores and 23 Hollister Co. stores internationally.

 

During fiscal 2010, Abercrombie is expecting to open flagship stores in Copenhagen, Denmark and Fukuoka, Japan, and a Hollister Epic store at Fifth Avenue in New York. Further, the company also expects to start approximately 25 international mall-based Hollister stores and one Abercrombie & Fitch store in Canada.

 

Abercrombie’s shares maintain a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation. Our long-term recommendation for the stock remains ‘Neutral’.