Foreign income of Abercrombie stimulates the it to make a profit

NEW YORK - retailer teen Preppy Abercrombie & Fitch Co., said that international sales helped push the profitability of the first quarter.

Abercrombie said Wednesday that its quarterly net income was $ 25.1 million, or 28 cents per share, compared to a loss of $ 11.8 million, or 13 cents per share, in the first quarter of last year.

The company, known for clothing pricey, suffered in the recession as people reduced spending, but he began to rebound. Revenue at stores open at least a year rose 10 percent in February to April from the previous year. It is an important measure of underlying business health because it excludes stores recently opened or closed.

Overall income increased 22% $ 837 million, helped by an increase of 64 per cent of international income and an increase of 13% to the United States.

Abercrombie, who also holds the Gilly Hicks, abercrombie and Hollister marks, is closing struggling stores to the United States but more locations overseas to opening. Executives said that they see strong growth particularly in the United Kingdom, Germany and other parts of Europe. They held Wednesday earnings call from Paris, because the chain prepares to open a shop on the Champs Elysées Abercrombie Thursday.

Like his peers, Abercrombie has faced cotton soaring costs that could cut into profit. But Brian Tunick, an analyst with JPMorgan Chase & Co., noted that the price of cotton began to fall in early March, and he asked how that would affect profit margins.

Chief Financial Officer Jonathan Ramsden, stated that "would be a tailwind for us", but added that "we don't know what will happen with the rise in the price.

Abercrombie wants to convince customers, who are accustomed to deep discounts, in the recession return to pay the full price for its clothing. Ramsden noted that stores in tourist areas do usually offer promotions.

Brian Sozzi, analyst of Wall Street Strategies Inc., said he believes that abercrombie has already started increase in retail prices. The Abercrombie spokesperson was not immediately available for comment. The company stated that its profit margins could be under pressure by the increase in spending.

Abercrombie is also seeking ways to trim costs. In addition to the closure of stores, it is combining two distribution centres Americans and make an expedition by boat instead of the aircraft.

Excluding discontinued operations, Abercrombie said it earned 27 cents per share. Analysts expected 11 cents per share.

The company had fewer shares outstanding at the end of the first quarter of this year than the previous year, which helped increase its earnings per share. Abercrombie bought 428,800 shares of its common shares at a price of $ 25.5 million in the first quarter of this year.

The company tried to reinstate in his State of Ohio home - rather than in Delaware, where many companies choose to incorporate because of favourable business laws - to demonstrate the commitment of the Ohio.

The company has cancelled a vote by shareholders on the matter, this year, saying: it was not enough support.