EmailAbercrombie & Fitch (ANF $34.84 +2.51) reported second quarter earnings of $0.19 per share, $0.02 better than the Capital IQ consensus of $0.17, and a penny better than guidance range issued on August 1st, while revenues rose 3.8% year/year to $951.4 million versus the $953.61 mln consensus (in line with guidance on Aug 1st). The company reaffirmed guidance for fiscal year 2013 with EPS of $2.50-2.75 versus the $2.66 consensus. Total comparable store sales for the quarter decreased 10% relative to last year. This projection assumes comparable store sales will decline 10% for the second half of the year. The Company continues to expect substantial recovery of the gross margin rate erosion seen in 2011 on a 2012 full year basis.
In addition to lower sales, the reduction in projected earnings per share also reflects the impact of a stronger US dollar and the impact of an increase in the effective tax rate. The Company now expects the tax rate for the year as a whole to be in the high 30s. "The second quarter results we are reporting today are disappointing and below our expectations coming into the quarter. In particular, we saw a further deceleration in the trend in our international stores, while our U.S. chain stores also compared negatively for the quarter for the first time since 2009. Our direct to consumer business remained a bright spot, posting its tenth successive quarter with growth of 25% or better." The company increased the existing share repurchase authorization by ten million shares.
