Abercrombie Q1 profit down 88%, hurt by 'difficult' European market

New Albany, Ohio -- Abercrombie & Fitch Co. reported a 88% decline in its first quarter profit, hurt in part by difficult market conditions in Europe.

For the quarter ended April 28, retailer earned $3.0 million compared with $25.1 million last year. Sales rose 10% to $921.2 million, but same-store sales were down 5%.

"While we are disappointed that European sales trends remain challenging in a very difficult macroeconomic environment, we are largely satisfied with our overall performance for the quarter in that context,” stated Mike Jeffries, CEO and chairman, Abercrombie & Fitch.

Jeffries said the company’s U.S. business, including direct-to-consumer, increased 4% on a comparable basis, on top of a strong performance last year. By brand, comparable store sales decreased 4% for Abercrombie & Fitch, decreased 11% for Abercrombie kids, and decreased 5% for Hollister Co.

“Our international business comped negatively, but the economics remain strong and we delivered overall international sales growth of 42% including a strong performance in direct-to-consumer,” he said. “With cotton cost issues now largely behind us, we look forward to strong year over year earnings growth in the back half of the year."

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