NEW YORK (AP) - Abercrombie & Fitch Co.'s profit almost doubled in its fiscal fourth quarter as business improved in the U.S. and overseas revenue continued to grow.
The preppy teen clothing company, which has expanded internationally to offset slower U.S. growth, also said it will be increasing prices to deal with rising costs, a situation many retailers and consumer product companies are finding themselves in these days.
Abercrombie's stock gained $3.04, or 5.7 percent, to $56.45 in morning trading Wednesday. Over the last year, the shares have traded in a range of $29.94 to $58.50.
For the fourth quarter ended Jan. 29, Abercrombie reported net income of $92.6 million, or $1.03 per share, up sharply from $47.5 million, or 53 cents per share, a year ago.
Taking out a charge for a write-down and costs for store closings, adjusted earnings climbed to $1.38 per share. Analysts polled by FactSet expected lower adjusted earnings of $1.31 per share.
Revenue rose 23 percent to $1.15 billion from $936 million, meeting Wall Street's forecast.
Domestic revenue rose 13 percent in the quarter. These results were helped by aggressive promotions and an appealing product assortment, CEO and Chairman Mike Jeffries said during the company's conference call.
U.S. shoppers have been slow to return to their old shopping habits, instead hanging on to the bargain hunting skills used during the recession. This has made it harder for retailers, pushing some to ramp up promotions while trying to keep a lid on costs and inventory levels.
But Chief Financial Officer Jonathan Ramsden said Abercrombie is hoping to have fewer promotions that are not as deep going forward.
The story has been better abroad, where Abercrombie enjoyed a 61 percent surge in revenue. Jeffries said European results have been extremely strong, with Hollister Co. finding success in countries such as Germany, Spain and the U.K.
Revenue at stores open at least a year, a key retail measure, rose 13 percent in the fourth quarter. This figure is important to retailers because it excludes results from stores opened or closed in the past year.
Abercrombie & Fitch stores open at least a year reported a 13 percent rise in revenue and Abercrombie kids stores open at least a year posted a 9 percent increase. Revenue at Hollister Co. stores open at least a year also gained 13 percent.
While its revenue results are encouraging, Abercrombie said it is facing continued pressured from rising sourcing costs. Jeffries said the company expects to boost its prices because it is probably dealing with double-digit cost increases for the fall 2011 season.
Abercrombie, based in New Albany, Ohio, said Wednesday that its full-year earnings surged to $150.3 million, or $1.67 per share, from $254,000, or break-even per share, in the prior year.
Annual revenue increased 18 percent to $3.47 billion from $2.93 billion, while revenue at stores open at least a year rose 7 percent.
The retailer continues to push forward with its overseas expansion, with plans to open Abercrombie & Fitch flagship stores in Paris; Madrid; Dusseldorf, Germany; Brussels; Dublin; and Singapore in fiscal 2011. It also expects to open 30 to 40 Hollister stores in overseas malls.
The company anticipates a "minimal number" of stores opening in the U.S., with about 50 domestic locations likely to close during the fiscal year.
On Tuesday Abercrombie declared a quarterly dividend of 17.5 cents. The dividend will be paid on March 15 to shareholders of record on Feb. 25.
Abercrombie & Fitch had 1,069 stores at the end of fiscal 2010.