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Abercrombie Soars 12% on Surprise Hollister Comps Growth Despite Profit Loss

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On Thursday, shares of Abercrombie & Fitch Co. (ANF - Free Report) are soaring, up over 12% after the iconic mall retailer said Hollister reported its first quarterly growth in comparable sales in a year.

Abercrombie posted GAAP earnings of 71 cents per share, missing the Zacks Consensus Estimate of 76 cents per share. Revenues came in at $1.036 billion, lagging behind our consensus estimate of 1.044 billion and decreased 6.9% year-over-year. Total comparable sales for the fourth quarter declined 5%.

By brand, Abercrombie and Fitch reported a comps decline of 13%, but Hollister saw a 1% increase in sales for Q4. Hollister, which makes up almost 60% of the retailer’s net sales, is Abercrombie’s Southern California-inspired subsidiary. According to Reuters, who cite a pre-earnings client note from Stifel, Nicolaus & Co., its holiday collection “looked on-trend and attractive,” most likely driving traffic and sales.

Abercrombie & Fitch Company Price, Consensus and EPS Surprise

Abercrombie & Fitch Company Price, Consensus and EPS Surprise | Abercrombie & Fitch Company Quote

“While overall results did not meet expectations, 2016 was a year of significant progress on each of our strategic priorities. We continued to proactively respond to the evolving retail landscape through our store closure and channel optimization initiatives,” said Fran Horowitz, CEO of Abercrombie.

Abercrombie also announced it closed 54 stores in 2016, mostly in the United States, and that it will close an additional 60 locations this year. This means Abercrombie’s total store count will shrink to 670 stores, but the company isn’t the only one drastically shuttering stores in 2017. Macy’s (M - Free Report) , Sears (SHLD - Free Report) , Gap (GPS - Free Report) , American Eagle Outfitters (AEO - Free Report) , and The Limited have all announced store closings.

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