Cost increases impact Abercrombie & Fitch Q3

US: Cost increases impact Abercrombie & Fitch Q3

By Richard Woodard | 17 November 2011

Q3 net profit up 1.8% to US$50.9m
Net sales up 21% to $1.076bn
Gross profit affected by cost increases

Teen apparel retailer Abercrombie & Fitch has posted a 1.8% increase in third quarter profits, with a 21% sales hike offset by higher costs.

The company said US sales were up 14% to $820.2m in the three-month period, while international revenues surged 56% to $255.7m and direct-to-consumer sales rose 41% to $132.4m.

Comparable store sales increased 7%, broken down into increases of 4% for Abercrombie & Fitch, 6% for Abercrombie Kids and 8% for Hollister.

Gross profit dropped 360 basis points to 60.1%, affected by an increase in average unit cost.

“While our results for the third quarter were impacted by costing challenges combined with greater uncertainty in the macroeconomic environment, we remain very confident in our strategy, the underlying strength of our brands and our ability to create long-term shareholder value,” said Mike Jeffries, company CEO and chairman.

Sectors: Apparel, Finance, Retail