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Abercrombie & Fitch Co. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: September 7, 2011 01:08PM

Abercrombie & Fitch Co. (ANF) filed Quarterly Report for the period ended 2011-07-30. Abercrombie & Fitch Co. has a market cap of $5.28 billion; its shares were traded at around $60.19 with a P/E ratio of 23.5 and P/S ratio of 1.5. The dividend yield of Abercrombie & Fitch Co. stocks is 1.2%.



Highlight of Business Operations:

During the second quarter of Fiscal 2011, net sales increased 23% to $916.8 million from $745.8 million for the second quarter of Fiscal 2010. The impact of foreign currency on sales (based on converting prior year sales at current year exchange rates) for the thirteen weeks ended July 30, 2011 was a benefit of approximately 1.6% of sales. The gross profit rate for the second quarter of Fiscal 2011 was 63.6% compared to 65.1% for the second quarter of Fiscal 2010. Operating income was $47.2 million for the second quarter of Fiscal 2011 compared to $27.6 million for the second quarter of Fiscal 2010. The Company had net income of $32.0 million for the second quarter of Fiscal 2011 compared to a net income of $19.5 million for the second quarter of Fiscal 2010. Net income per diluted share was $0.35 for the second quarter of Fiscal 2011 compared to $0.22 for the second quarter of Fiscal 2010. Net income for the second quarter of Fiscal 2010 included a charge of $0.02 per diluted share associated with store closures. Results from discontinued operations were immaterial for the thirteen weeks ended July 30, 2011 and July 31, 2010.

During the Fiscal 2011 year-to-date period, net sales increased 22% to $1.753 billion from $1.434 billion in Fiscal 2010. The impact of foreign currency on sales for the twenty-six weeks ended July 30, 2011 was a benefit of approximately 1.2% of sales. The gross profit rate for the Fiscal 2011 year-to-date period was 64.3% compared to 63.9% for the comparable year-to-date period for Fiscal 2010. Operating income was $85.9 million in the Fiscal 2011 year-to-date period, compared to $8.8 million in Fiscal 2010. The Company had net income of $57.2 million in the Fiscal 2011 year-to-date period compared to $7.7 million in Fiscal 2010. Net income per diluted share was $0.63 in the Fiscal 2011 year-to-date period compared to $0.09 in Fiscal 2010. Net income for the second quarter of Fiscal 2010 included a charge of $0.02 per diluted share associated with store closures. Fiscal 2011 year-to-date net income per share included a benefit of $0.01 per diluted share from discontinued operations. Results from discontinued operations were immaterial for the Fiscal 2010 year-to-date period.

Net cash used for operating activities was $0.6 million for the twenty-six weeks ended July 30, 2011. In addition, the Company used cash of $133.0 million for capital expenditures, $43.8 million for the repayment of the outstanding balance under the credit agreement, $30.6 million for dividends, and $89.9 million to repurchase 1.4 million shares of A&F’s Common Stock during the twenty-six weeks ended July 30, 2011. As of July 30, 2011, the Company had $539.6 million in cash and equivalents, no borrowings under the credit agreement and immaterial outstanding letters of credit, compared to $596.5 million in cash and equivalents, borrowings under the credit agreement of $53.2 million and outstanding letters of credit of $24.4 million as of July 31, 2010. The decrease in letters of credit outstanding is related to an adjustment to vendor payment terms.

Net sales for the second quarter of Fiscal 2011 were $916.8 million, an increase of 23% from net sales of $745.8 million during the second quarter of Fiscal 2010. The net sales increase was attributable to a 9% increase in total comparable store sales, a 28% increase in the direct-to-consumer business, including shipping and handling revenue, and 31 new stores, primarily international, net of store closures. The impact of foreign currency on sales (based on converting prior year sales at current year exchange rates) for the thirteen weeks ended July 30, 2011 was a benefit of approximately $11.7 million. Including direct-to-consumer sales, U.S. sales increased 12% to $684.9 million and international sales increased 74% to $231.9 million.

Net income for the second quarter of Fiscal 2011 was $32.0 million compared to $19.5 million for the second quarter of Fiscal 2010. Net income per diluted share for the second quarter of Fiscal 2011 was $0.35 compared to $0.22 for the same period of Fiscal 2010. Net income for the second quarter of Fiscal 2010 included a charge of $0.02 per diluted share associated with store closures.

Net income for the year-to-date period of Fiscal 2011 was $57.2 million compared to net income of $7.7 million for the year-to-date period of Fiscal 2010. Net income per diluted share for the year-to-date period of Fiscal 2011 was $0.63 compared to $0.09 for the same period of Fiscal 2010. Net income per diluted share for the year-to-date period of Fiscal 2011 included net income of $0.01 per diluted share from discontinued operations related to the settlement of outstanding lease obligations.

Read the The complete Report



Stocks Discussed: ANF,
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