Abercrombie & Fitch Co. (ANF) said its first quarter net income dropped to $3 million or $0.03 per share from $25.1 million or $0.28 per share a year ago.
On average, 32 analysts polled by Thomson Reuters expected the company to report earnings of $0.02 per share. Analysts' estimates typically exclude special items.
Net sales grew to $921.2 million from $836.7 million in the prior-year quarter. Analysts expected revenues of $951.37 million.
Total comparable store sales for the quarter decreased 5%.
Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said,
"While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context. Our U.S. business, including direct-to-consumer, increased 4% on a comparable basis, on top of a strong performance last year. Our international business comped negatively, but the economics remain strong and we delivered overall international sales growth of 42% including a strong performance in direct-to-consumer.
With cotton cost issues now largely behind us, we look forward to strong year over year earnings growth in the back half of the year."
Based on first quarter trends, the company is now projecting same store sales to be down by a mid-single digit percentage on a full-year basis.
Notwithstanding lower sales expectations, the company continues to expect full year 2012 earnings per share in the range of $3.50 to $3.75, with lower sales offset by a higher projected gross margin rate, lower expenses, and a lower share count at the end of the first quarter. Analysts expect earnings per share of $3.55.
On May 15, 2012, the Board of Directors declared a quarterly cash dividend of $0.175 per share on the Class A Common Stock of Abercrombie & Fitch Co. payable on June 12, 2012 to shareholders of record at the close of business on May 29, 2012.
Additionally, the Board increased the existing share repurchase authorization by ten million shares, bringing the shares available for purchase under its publicly announced share repurchase authorization to 12.9 million shares.
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