U.S. teen apparel retailer Abercrombie & Fitch (NYSE: ANF) which has put itself up for sale, posted a smaller-than-expected drop in comparable-store sales, helped by strong demand for Hollister, its California beach-themed brand of surfwear.
Shares of the company, for which rival American Eagle Outfitters (NYSE: AEO) and private equity firm Cerberus Capital Management are reportedly planning to bid, rose 78 cents, or 6.1% to $13.67, soon after the opening bell on Thursday, a far cry from the stock’s 52-week high of $25.29.
Meantime, American Eagle shares improved 14 cents, or 1.2%, to $11.46.
Abercrombie and other U.S. apparel retailers have been hurt by fierce competition from fast-fashion retailers such as H&M and Inditex's Zara as well as from online retailers such as Amazon.com.
Same-store sales for the company's Hollister brand, which has remained flat for two years, rose 3% in the first quarter ended April 29, while analysts polled by research firm Consensus Metrix had expected it to grow a mere 0.8%.
Sales at established ANF stores fell 3% in the first quarter, but beat the 3.4% decline expected by analysts.
The Wall Street Journal reported Wednesday that private equity firm Cerberus Capital and American Eagle are working on a joint bid for Abercrombie
Abercrombie's net sales fell 3.6% to $661.1 million, better than analysts expectations of $651.3 million
Net loss attributable to the company widened to $61.7 million, or 91 cents per share, in the quarter, from $39.6 million, or 59 cents per share, a year earlier.
