Abercrombie & Fitch Co. (ANF), a specialty retailer of casual apparel, reported solid sales albeit at lower comps for the four-week period ended January 29, 2011. After an increase of 22% in November, the comparables somewhat moderated to a 15.0% growth in December and then fell to a 4.0% decline in January 2011.
In the month under review, total company direct-to-consumer net merchandise sales climbed 23% to $33.9 million and total company international net sales, including direct-to-consumer net sales, jumped 42% to $50.3 million.
Abercrombie’s brand names, Abercrombie & Fitch delivered same-store sales growth of 3.0% while Hollister Co. declined 8.0% and its children’s brand, Abercrombie Kids, plummeted 11%.
Keeping up with the increase in sales, total sales for January shot up 6.0% to $234.1 million from $221.5 million in the same month last year, following a 26.0% year-over-year growth in December 2010.
For the fourth quarter of fiscal 2010, comparable-store sales climbed 13.0% and total sales were up 23.0% to $1,149 million from $936 million in the year-ago period.
As for fiscal 2010, the company reported comparable-store sales growth of 7%. Net sales for the period increased 18% to $3,469 million.
Abercrombie operated a total of 1,069 stores. The company operated 316 Abercrombie & Fitch stores, 181 Abercrombie Kids stores, 502 Hollister Co. stores and 18 Gilly Hicks stores in the United States. The company also operated 9 Abercrombie & Fitch stores, 4 Abercrombie Kids stores, 38 Hollister Co. and 1 Gilly Hicks store internationally.
The Zacks Consensus Estimate for the fiscal year ending January 2011 is currently pegged at $1.97 per share, which increased by 4 cents over the past 30 days. For the fourth quarter of fiscal 2010, the Zacks Consensus Estimate has moved up by 5 cents to $1.30 over the past month.
Abercrombie operates in a highly fragmented market and competes with national as well as regional players. Apart from competing with larger retailers such as Gap Inc. (GPS), Abercrombie is facing increasing competition from value-priced specialty retailers such as Aeropostale Inc. (ARO).
Abercrombieshares maintain a Zacks #3 Rank, which translates into a short-term Hold rating. Our long-term recommendation on the stock remains Neutral.
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