Yahoo Finance Abercrombie & Fitch 4Q adj. profit beats Street
Abercrombie & Fitch 4Q adj. profit tops Street's view; announces $150M accelerated buyback
NEW ALBANY, Ohio (AP) -- Abercrombie & Fitch's fourth-quarter net income fell 58 percent, dragged down by a number of one-time charges, including costs tied to the closure of the retailer's Gilly Hicks stores.
But adjusted profit easily topped Wall Street's expectations and shares jumped more than 8 percent as the company initiated a $150 million accelerated share buyback program.
Abercrombie & Fitch has undergone a series of changes recently. Last month the chain announced the separation of its chairman and CEO roles. It's also expanded its board of directors and terminated a shareholder rights plan. Shareholder rights plans, or "poison pills," are typically used by a company when it is trying to ward off a hostile takeover attempt.
For the period ended Feb. 1, Abercrombie & Fitch earned $66.1 million, or 85 cents per share. A year earlier the New Albany, Ohio, company earned $157.2 million, or $1.95 per share.
Stripping out restructuring charges related to Gilly Hicks, impairment charges and other items, earnings were $1.34 per share.
Analysts polled by FactSet predicted earnings of $1.03 per share.
Abercrombie & Fitch announced in November that it planned to close all of its stand-alone Gilly Hicks stores. On Wednesday the retailer said it still expects to substantially complete all of the store closures by the end of this quarter. It will continue to sell Gilly Hicks products through its Hollister stores and website.
Quarterly revenue declined 12 percent to $1.3 billion from $1.47 billion as sales weakened in the U.S. and abroad. Wall Street was calling for $1.35 billion in revenue.
Full-year net income dropped to $54.6 million, or 69 cents per share, from $237 million, or $2.85 per share, in the previous year.
Adjusted earnings were $1.91 per share.
Annual revenue fell 9 percent to $4.12 billion from $4.51 billion.
Going forward, Abercrombie & Fitch anticipates fiscal 2014 earnings of $2.15 to $2.35 per share. The outlook assumes a high-single digit drop in sales at stores open at least a year and about a 20 percent increase in comparable direct-to-consumer sales.
Analysts expect earnings of $2.33 per share.
Abercrombie & Fitch Co. said that the $150 million accelerated stock buyback will occur in the first quarter.
Shares of the company rose $3 to $38.99 before the market opened.
