Youth-oriented apparel retailer Abercrombie & Fitch Co has reported an increase in fourth quarter earnings to $94.3 million, up from $92.8m in the same period a year earlier.

The Ohio-based company, which attributed the increase to unexpectedly strong sales and cost cutting, also posted a five per cent year-on-year sales rise to $560.4m for the quarter.

Same-store sales, meanwhile, fell 11 per cent for the three-month period.

"I'm pleased that despite a difficult Christmas season and a tough year in terms of same-store sales, we were able to report record profit for the fourth quarter and the year," CEO Mike Jeffries said.

"The decision to begin paying a cash dividend reflects our commitment to increasing shareholder value and demonstrates our financial strength and confidence."

Abercrombie operated a total of 700 stores at the end of the quarter.