NEW ALBANY, Ohio (AP) – Taking a path at odds with other retailers who have slashed prices to lure customers through the door, Abercrombie & Fitch focused instead on reinvigorating its brand and it paid off in the third quarter as profits more than doubled.
Investors who have been rattled by weak sales and dismal forecasts from the sector rewarded Abercrombie before the opening bell Friday, sending shares up 15 percent.
“Our third quarter results exceeded our expectations coming into the quarter and provide the strongest validation yet that our initiatives are working,” said Executive Chairman Arthur Martinez.
The shift in strategy can be seen in the company’s quarterly adjusted gross profit rate, which was 63.7 percent. That’s an improvement of 120 basis points, and 210 basis points on a constant currency basis, over last year.
For the period ended Oct. 31, Abercrombie & Fitch earned $41.9 million, or 60 cents per share. A year earlier it earned $18.2 million, or 25 cents per share.