ANF falls 11% on weak same store sales guidance

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Last Update: 16-May-12 10:15 ET

Abercrombie & Fitch (ANF $40.40 -5.00) reported first quarter earnings of $0.03 per share, $0.02 better than the Capital IQ Consensus Estimate of $0.01. Revenues rose 10.1% year over year to $921.2 million versus the $951.23 million consensus. Total comparable store sales for the quarter decreased 5%. The gross profit rate for the first quarter was 62.6%, 240 basis points lower than last year's first quarter gross profit rate. The decrease in the gross profit rate was driven by a significant increase in average unit cost. 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 diluted earnings per share in the range of $3.50 to $3.75 (versus the $3.56 Capital IQ Consensus Estimate) 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. The Company continues to anticipate opening international Abercrombie & Fitch flagship locations in Hong Kong, Munich, Dublin and Amsterdam in Fiscal 2012. The Company continues to anticipate opening close to 40 international Hollister stores throughout the year. Based on current new store plans and other planned expenditures, the Company continues to expect total capital expenditures for 2012 to be approximately $400 million, predominately related to new stores, store refreshes and remodels.