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Abercrombie & Fitch, Dollar Tree, Chico's Fas Q3 Results Top Estimates

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U.S. retailers Abercrombie & Fitch Co. (ANF), Dollar Tree Inc. (DLTR) and Chico's Fas Inc. (CHS) on Tuesday reported results for the third quarter, with Abercrombie & Fitch slipping to a loss, while profit at Dollar Tree and Chico's Fas improving from last year.

Both adjusted earnings per share and net sales at Abercrombie & Fitch, Dollar Tree and Chico's Fas topped analysts' estimates. Abercrombie & Fitch and Dollar Tree also raised their respective sales guidance for the full-year 2022, while Chico's Fas boosted its annual earnings and nets sales outlook.

In pre-market trading, Abercrombie & Fitch shares are soaring $3.50 or 18.77 percent to trade at $22.13 on the NYSE, and, Dollar Tree shares are slipping $7.20 or 4.36 percent to trade at $158.04 on NASDAQ.

Specialty retailer Abercrombie & Fitch reported a net loss attributable to the company of $2.21 million or $0.04 per share for the third quarter, compared to net income of $47.23 million or $0.77 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $0.01 per share, compared to $0.86 per share last year.

Net sales for the quarter declined 3 percent to $880.08 million from $905.16 million in the same quarter last year. Net sales were flat on a constant currency basis.

On average, analysts polled by Thomson Reuters expected the company to report a loss of $0.15 per share on revenues of $831.13 million for the quarter. Analysts' estimates typically exclude special items.

Abercrombie delivered its highest third-quarter net sales since 2014 and its tenth consecutive quarter of average unit retail (AUR) growth.

Hollister brand sales were down 12 percent to $457.75 million, while Abercrombie brand sales grew 10 percent to $422.33 million from last year.

Sales in the U.S. increased 3 percent to $674.5556 million, while international sales declined 18 percent to $205.53 million from last year.

Gross profit margin was down approximately 450 basis points from last year, primarily driven by 370 basis points of higher freight and raw material costs and 60 basis points from the adverse impact of exchange rates.

Looking ahead, Abercrombie projects a net sales decline of 2 to 4 percent in the fourth quarter from last year's $1.2 billion as well as a 2 to 3 percent decline for the full-year 2022 from last year's $3.7 billion, compared to the prior forecast for a mid-single-digits decline.

The Street is looking for net sales $1.09 billion for the quarter and net sales decline of 4.7 percent to $3.54 billion for the year.

Meanwhile, Dollar Tree reported that net income increased to $266.9 million or $1.20 per share from $216.8 million or $0.96 per share in the prior-year quarter. Net sales for the quarter grew 8.1 percent to $6.94 billion from $6.42 billion in the same quarter last year. Same-Store Sales were up 6.5 percent.

The Street expected the company to report earnings of $1.18 per share on revenues of $6.84 billion for the quarter.

Net sales at Family Dollar stores increased to $3.76 billion from $3.42 billion, with same-store sales growth 4.1 percent, and net sales at Dollar Tree stores grew to $3.18 billion from $3.0 billion, with same-store sales growth 8.6 percent.

Gross margin for the quarter improved 240 basis points to 29.9 percent, primarily driven by improved initial mark-on and leverage on distribution and occupancy costs, partially offset by a product mix shift to lower-margin consumable products, inflationary cost pressures, higher shrink and markdowns.

Looking ahead to the fourth quarter, the company estimates consolidated net sales between $7.54 billion and $7.68 billion, based on a mid- to high-single-digit increase in same-store sales for the enterprise. Analysts expect the company to report sales of $7.52 billion for the quarter.

For fiscal 2022, the company now projects earnings in the lower half of the prior range of $7.10 to $7.40 per share on consolidated net sales between $28.14 billion and $28.28 billion, based on a mid-single-digit increase in same-store sales and about 2.8 percent selling square footage growth.

Previously, the company expected earnings in the range of $7.10 to $7.40 per share on consolidated net sales between $27.85 billion and $28.10 billion, based on a mid-single-digit increase in same-store sales and about 3.5 percent selling square footage growth.

The Street is looking for earnings of $7.33 per share on sales of $28.08 billion for the year.

Fashion retailer Chico's Fas Inc. (CHS) on Tuesday reported net income for the third quarter of $24.62 million or $0.20 per share, higher than $18.23 million or $0.15 per share in the year-ago quarter.

Excluding items, adjusted earnings for the quarter was $0.20 per share, compared to $0.18 per share in the prior-year quarter.

Total net sales for the quarter grew 14.3 percent to $518.33 million from $453.64 million in the same quarter last year.

Analysts expected the company to report loss of $0.13 per share on revenues of $508.0 million for the quarter. Analysts' estimates typically exclude special items.

Total Company comparable sales for the quarter were up 16.5%, with Chico's and White House Black Market (WHBM) comparable sales growing 28.8% and 17.0%, respectively. Soma comparable sales declined 6.1 percent.

Looking ahead to the fourth quarter, the company expects earnings in a range of $0.07 to $0.10 per share on consolidated net sales between $535 million and $555 million. Analysts expect earnings of $0.10 per share on net sales of $557.0 million for the quarter.

For fiscal 2022, the company now projects earnings in a range of $0.89 to $0.92 per share on consolidated net sales between $2.153 billion and $2.173 billion.

Previously, the company expected earnings in the range of $0.79 to $0.87 per share on consolidated net sales between $2.14 billion and $2.17 billion.

The Street is looking for earnings of $0.85 per share on net sales of $2.17 billion for the year

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