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Abercrombie surges on upbeat Q4 profit, accelerated repurchase

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Abercrombie & Fitch Co. (NYSE:ANF), a teen apparel retailer, surged to the highest in nearly six months after posting fourth-quarter profit that surpassed analysts’ estimates and saying it would buy back $150 million in shares in the current quarter. 

Abercrombie rallied to $40.42, the highest intraday price since Aug. 21, and was trading at 40.35, up 12.1 percent, at 3:43 p.m. in New York.

Profit stripping out restructuring and asset-impairment charges was $1.34 a share in the three months ended Feb. 1, the New Albany, Ohio-based company said in a statement today. Analysts were predicting $1.04 a share.

For 2014, the company projected profit of $2.15-$2.35 a share, higher than the analysts' average estimate of $1.62 a share, according to Thomson Reuters.

"We are encouraged by the progress we are making as we continue to aggressively execute against our long-range plan objectives, which we believe will generate meaningful improvements in our business, and create significant value for shareholders," Chief Executive Officer Mike Jeffries said in the statement.

Abercrombie said it expected gross savings of at least $145 million in 2014 from cost-cutting initiatives, almost five times the amount it saved in 2013. 

The company also announced the accelerated share-repurchase program that will be executed in the current quarter as part of its existing authorization to buy back 16.3 million shares.

Abercrombie's net income fell 58 percent to $66.1 million, or 85 cents a share.

Revenue fell 12 percent to $1.30 billion, but surpassed analysts' average estimate of $1.26 billion. Same-store sales slid 8 percent in the quarter.

Abercrombie and its competitors Aeropostale Inc. (NYSE:ARO) and American Eagle Outfitters (NYSE:AEO), have lost customers to less expensive and trendier "fast fashion" chains such as Forever 21, H&M and Inditex's (MCE:ITX) Zara.

The stock, which has 5 "strong buy", 7 "buy", 20 "hold" and 2 "underperform" recommendations from analysts, had gained 9.4 percent this year before today.

 

 

 

 

Quick facts: Abercrombie & Fitch

Price: 16.65 USD

NYSE:ANF
Market: NYSE
Market Cap: $1.04 billion
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