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Christmas Comes Late For Abercrombie
Thursday, February 04, 2010
Source: Forbes.com
By: Melanie Lindner
Teen retailer had a rocky holiday season, but gift cards and sales led to a surprise jump in January sales.
Attention mall retailers: discounts garner store traffic.
That was the message in January sales report issued by Abercrombie & Fitch ( ANF - news - people ) Thursday morning. The youth-targeted clothing retailer comfortably topped expectations, thanks at least in part to postholiday sales, with another boost coming from the use of gift cards. For the four-week period ending Jan. 31, the New Albany, Ohio-based retailer said its net sales hit $222.8 million, up a whopping 16% from $191.5 million in the year-ago quarter.
Coming off a shaky holiday-season performance, those figures represented a companywide comparable-store sales jump of 8% from January 2009 for Abercrombie, which includes the eponymous stores as well as Hollister and Ruehl. (The latter is being discontinued in the first quarter of 2010.)
Abercrombie & Fitch stores saw the biggest gains with a 12% comparable-store sales increase in its adult branch and a 10% jump for Abercrombie kids. According to Jefferies analyst Randal Konik, consumers’ response to gift cards and clearance sales gave Abercrombie & Fitch a much needed boost to start off 2010.
Investors rallied around the trendy retailer in Thursday trading, sending shares up $1.25, or 3.9%, to close at $33.21.
Brean Murray Carret analyst Eric Beder told investors that the company still faces myriad problems but that its shares have reached the point where some investors will become more aggressive in buying them. "The company remains the high-cost player in a cut-rate world, as American Eagle and Aeropostale have remained aggressive in running discounts that have continued to undercut any price drops Abercrombie has attempted, especially at the Hollister chain," the analyst said.
The Associated Press contributed to this article.
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