Abercrombie & Fitch posts surprise rise in same-store sales

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Teen apparel retailer Abercrombie & Fitch Co (ANF.N) posted a surprise rise in sales in the holiday-shopping quarter, snapping a streak of more than three years of declines, due to strong demand for its Hollister branded clothing.

The retailer's results on Wednesday showed its efforts to revive sales growth by revamping merchandise and improving shoppers' in-store experience were paying off, and sent its shares up nearly 9 percent to $31.96 in premarket trading.

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Abercrombie said sales at stores open at least 12 months rose 1 percent in the fourth quarter ended Jan. 30. Analysts on average were expecting a decline of 0.10 percent, according to research firm Consensus Metrix.

"They (results) are a sign that the brand continues to make progress in what remains a challenging market during a particularly difficult period of trading," said Neil Saunders, chief executive of research firm Conlumino.

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SAN FRANCISCO, CA - AUGUST 26: Pedestrians walk by an Abercrombie & Fitch store on August 26, 2015 in San Francisco, California. Abercrombie & Fitch reported better-than-expected second quarter revenue falling to $817.8 million from $890.6 million one year ago. Analysts had predicted $811 million in revenue. (Photo by Justin Sullivan/Getty Images)
Shoppers carry an American Eagle Outfitters Inc. bag and Abercrombie & Fitch Co. bags in San Francisco, California, U.S., on Thursday, Aug. 16, 2012. American Eagle Outfitters Inc. is expected to release earnings data on August 22. Photographer: David Paul Morris/Bloomberg via Getty Images
SAN FRANCISCO, CA - AUGUST 26: Pedestrians walk by an Abercrombie & Fitch store on August 26, 2015 in San Francisco, California. Abercrombie & Fitch reported better-than-expected second quarter revenue falling to $817.8 million from $890.6 million one year ago. Analysts had predicted $811 million in revenue. (Photo by Justin Sullivan/Getty Images)
Shoppers walk past an Abercrombie & Fitch Co. store at the Roosevelt Field Mall in Garden City, New York, U.S., on Saturday, Nov. 14, 2015. The Bloomberg Consumer Comfort Index, a survey which measures attitudes about the economy, is scheduled to be released on November 19. Photographer: John Taggart/Bloomberg via Getty Images
MUNICH, GERMANY - OCTOBER 25: Male models pose outside the Abercrombie & Fitch flagship clothing store before the opening of Abercrombie & Fitch Munich flagship store on October 25, 2012 in Munich, Germany. (Photo by Hannes Magerstaedt/Getty Images)
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The retailer has reduced its logo-centric clothing, which had fallen out of fashion, and added trendier new styles in denim and Bohemian-inspired skirts and tops over the past year.

It has also remodeled Hollister stores by changing the music, lighting and how it stacks clothes in stores.

That helped same-store sales at Hollister increase 4 percent in the quarter, handily beating the 2.20 percent rise analysts were expecting.

Abercrombie said it expected company-wide same-store sales to be flat to slightly positive in fiscal 2016. Analysts on average had expected a rise of 0.8 percent.

However, the retailer's executive chairman, Arthur Martinez, said 2016 "is likely to remain a challenging environment", in part due to a strong U.S. dollar.

Net income attributable to the company rose 30.1 percent to $57.7 million in the latest fourth quarter. Excluding items, it earned $1.08 per share.

Net sales were $1.11 billion, down 0.6 percent and falling for the twelfth quarter in a row. But the decline has been slowing and sales have now beaten estimates for the third straight quarter.

Analysts on average had estimated a profit of 99 cents per share and sales of $1.10 billion, according to Thomson Reuters I/B/E/S.

Up to Tuesday's close, the company's stock had risen more than 20 percent in the last 12 months.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Savio D'Souza)

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GLENDALE, CA - SEPTEMBER 17: Atmosphere during the Nordstrom store opening gala at The Americana at Brand on September 17, 2013 in Glendale, California. (Photo by Donato Sardella/Getty Images for Nordstrom)
Pedestrians walk past an Hennes & Mauritz AB (H&M) store in the Center City area of Philadelphia, Pennsylvania, U.S., on Saturday, March 21, 2015. The Bloomberg Consumer Comfort Index, a survey which measures attitudes about the economy, is scheduled to be released on March 26. Photographer: Charles Mostoller/Bloomberg via Getty Images
Shoppers look at clothing during the grand opening of the Hennes & Mauritz AB (H&M) flagship store in New York, U.S., on Thursday, July 17, 2014. At 57,000 square feet, the new flagship located at 589 Fifth Avenue is the worlds largest H&M store. Photographer: Victor J. Blue/Bloomberg via Getty Images
A shopper is reflected in the window of a Marshalls Plc store in San Francisco, California, U.S., on Tuesday, March 3, 2015. The Bloomberg Consumer Comfort Index, a survey which is measures attitudes about the economy, is scheduled to be released on March 5. Photographer: David Paul Morris/Bloomberg via Getty Images
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