Abercrombie Q3 EPS tops estimates despite challenges cuts outlook

(MENAFN- ProactiveInvestors) Abercrombie & Fitch (NYSE:ANF) rose today after teen apparel retailer reported better-than-expected earnings in its fiscal third quarter despite some challenges.

Shares advanced 4.2 percent to $29.00 at 2:20 p.m. in Toronto paring this year’s retreat to 12 percent.

Net income was $18.2 million or $0.25 per share for the 13-week period ended Nov. 1 compared to a net loss of $15.6 million or $0.20 per share for the year-earlier period the New Albany Ohio-based company said in a statement today.

Removing certain charges earnings were $0.42 per share above the $0.41 average estimate of 30 analysts.

However the company reported revenue fell to $911.5 million from $1.03 billion year-over-year missing the $917 million that analysts expected.

Sales at stores open at least a year a key measure of a retailer's health as it excludes recently opened and closed stores tumbled 10 percent.

Abercrombie has been working to turn around its business by trimming costs trying to bring in trendier styles that appeal to fashion-conscious young shoppers and increase its online presence. The company has been losing customers to Inditex's Zara H&M and Forever 21 which offer newer styles at lower prices.

“… [O]ur third quarter results were disappointing in what remains a very challenging environment for young apparel” chief executive officer Mike Jeffiries said in the statement. “Comparable sales improved somewhat in November and this improvement was maintained through the Black Friday weekend.  However we expect conditions to remain difficult through the balance of the fourth quarter.”

The company whose brands include Abercrombie Hollister and Gilly Hicks now anticipates earning between $1.50 and $1.65 per share for the year down from its prior forecast of $2.15 to $2.35 per share. Analysts are anticipating full-year earnings of $1.83 per share.