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Abercrombie swings to profit in mixed Q3


New Albany, Ohio – The cool kid might still be cool, after all. Abercrombie & Fitch reported net income of $18.2 million in the third quarter of fiscal 2014, compared to a net loss of $15.6 million in the same period the prior year and beating Wall Street forecasts.

However, not all of Abercrombie’s results were quite so positive. Total company sales dropped 12% to $911 million and same-store sales declined 14%. Higher discounts and lower mall traffic negatively impacted sales. Direct-to-consumer sales climbed 8%, however. Lower expenses helped drive the company’s return to profitability.

Abercrombie anticipates that it will have opened a total of 12 full-price international stores for the year, including seven Hollister stores and four Abercrombie & Fitch stores. The company also expects to have opened nine international and U.S. outlet stores during the fiscal year. In addition, Abercrombie continues to expect to have closed approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.

“Our third quarter results were disappointing in what remains a very challenging environment for young apparel,” said Mike Jeffries, CEO. “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.”

Looking ahead, Abercrombie expects to create improvements through steps such as shifting to a branded structure, changes in assortment and customer engagement, investing in direct-to-consumer and omni-channel, expanding international reach, closing under-performing stores, and continuing to reduce expense.

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