BUSINESS

Abercrombie posts bigger loss, but expects sales to improve

Staff Writer
Columbus CEO

NEW ALBANY, Ohio (AP) — Abercrombie & Fitch, which is the midst of overhauling its racy image, said it expects sales to improve in the next year.

The teen retailer's shares rose more than 13 percent Thursday even though its first-quarter earnings and revenue missed Wall Street estimates.

Abercrombie & Fitch began to shake up its image earlier this year to reverse falling sales. In April, it said it will no longer have shirtless models in its stores and said it won't run "sexualized" ads. The company is also overhauling its merchandise.

Sales still fell 8 percent during the first quarter at stores open at least a year, hurt by the stronger dollar. But Abercrombie's Executive Chairman Arthur Martinez said the company had "sequential improvements in a number of areas" during the quarter.

"We have focused the entire organization on putting the customer at the center of everything we do, particularly with regard to the store experience and our merchandise assortments, " Arthur Martinez, A&F's executive chairman told investors during a conference call. "Our turnaround won't be accomplished overnight, but we are expecting that the changes will help us stabilize our business this year and lead to meaningful and lasting improvement moving forward."

Martinez is spearheading the company's operations after the sudden resignation of its long-time CEO Mike Jeffries in December 2014.

For the next quarter and second half of the year, Abercrombie said it expects sales at stores open a year to improve. The company has about 790 Abercrombie and Hollister stores around the world.

The New Albany, Ohio-based company reported first-quarter results on Thursday. Its loss widened to $63.2 million, or 91 cents per share. Losses, adjusted for non-recurring costs, were 53 cents per share. The average estimate of 17 analysts surveyed by Zacks Investment Research was for a loss of 34 cents per share.

Revenue fell 14 percent to $709.4 million, also falling short of Street forecasts. Fourteen analysts surveyed by Zacks expected $733.7 million.

Abercrombie & Fitch Co. shares rose $2.65, or 13.5 percent, to close at $22.30 on Thursday. Its shares are down about 36 percent in the last 12 months.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ANF at http://www.zacks.com/ap/ANF

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Keywords: Abercrombie & Fitch, Earnings Report