* Q4 Hollister comp sales up 1 pct vs est. 0.7 pct drop
* To remodel about 40 Hollister stores in 2017
* Shares soar 14 pct
(Adds details, updates shares)
By Sruthi Ramakrishnan
March 2 Teen apparel retailer Abercrombie &
Fitch Co said it expected its brands to perform better
in 2017 and reported the first rise in quarterly comparable
sales in a year at its Hollister brand, sending the company's
shares up 14 percent.
Hollister, the retailer's California beach-themed brand of
surfwear, reported a surprise 1 percent rise in comparable sales
for the fourth quarter ended Jan. 28.
Analysts on average were expecting a 0.7 percent decline,
according to research firm Consensus Metrix.
Abercrombie and rivals such as American Eagle Outfitters Inc
and Gap Inc have been closing stores and
investing in their online businesses as they try to adjust to
rapidly changing consumer tastes and battle stiff competition
from Amazon.com Inc and fast-fashion retailers such as
H&M and Inditex's Zara.
Abercrombie, which has been struggling with falling sales
for the past four years, has been remodeling its Hollister
stores, hiring top designers and executives to woo back shoppers
to the company's biggest brand.
"A&F is going in the right direction," said Neil Saunders,
managing director of GlobalData Retail.
"As it has shown with Hollister, which is more advanced in
its redevelopment program, the reinvention work will ultimately
Abercrombie said it planned to remodel about 40 Hollister
stores in 2017.
The company is also opening seven stores under a new
prototype for its A&F brand, which is trying to move away from
being logo-centric, with a focus on customers above 18.
Comparable sales at Hollister are expected to either be flat
or improve in the year ending January 2018, while they are
likely to be better at the Abercrombie brand.
The expansion of its swimwear and re-launched intimate
apparel line Gilly Hicks, as well as the addition of more colors
and sizes across key apparel are expected to help attract
The company's overall comparable sales fell 5 percent in the
latest quarter, partly due to weak traffic at Abercrombie's
flagship stores and at tourist locations.
The company, which shut 54 stores in 2016 in the United
States, said it would close another 60 stores this year.
Net income attributable to Abercrombie & Fitch fell to $48.8
million, or 71 cents per share, in the quarter, from $57.7
million, or 85 cents per share.
Excluding one-time items, the company earned 75 cents per
share, in line with analyst's average estimate, according to
Thomson Reuters I/B/E/S.
The retailer's net sales fell about 7 percent to $1.04
billion, slightly missing the estimate of $1.05 billion.
The company's shares were up 13.3 percent at $13.25 in late
(Reporting by Sruthi Ramakrishnan and Gayathree Ganesan in
Bengaluru; Editing by Sai Sachin Ravikumar and Sriraj Kalluvila)