• Q4 net income US$19.6m, down from $92.6m
  • Net sales up 16% to $1.33bn
  • Company expects margin improvement in 2012 H2

Fashion retailer Abercrombie & Fitch posted a much-reduced net profit in the fourth quarter, impacted by rising costs and higher levels of markdowns in its stores.

The company was boosted in the three months to 28 January by a 4% rise in US sales to $962.2m, a 62% surge in international sales to $366.6m and a 41% increase in direct-to-consumer (DTC) sales to $212.3m.

However, its comparable store sales were flat, with Abercrombie & Fitch falling 4%, Abercrombie Kids down 3% and Hollister Co up 2%.

Full-year net sales were up 20%, giving net income of $127.7m, down 15% on 2010.

“Our results for the fourth quarter were below our expectations in an extremely challenging environment,” said Mike Jeffries, Abercrombie & Fitch chairman and CEO.

“However, we are confident that we are on track with our long-term strategy of leveraging the international appeal of our iconic brands to build a highly profitable, sustainable, global business.

“The overall economics of our business in Europe, in our US tourist stores and in our DTC business remain very strong.”

The company is now projecting earnings per share for fiscal 2012 of $3.50-3.75.