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fashion-features

Mixed Retail Results in 2nd Quarter Don’t Dampen Hope for Fall

While bad weather and markdown pressures hurt retailers’ second-quarter profits, initial earnings results indicated things could have been worse.

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“The sales environment has clearly been challenging,” Mike Jeffries, chairman and chief executive, acknowledged on an afternoon conference call. “I am not satisfied with the level of business and am adjusting inventory content to take advantage of classifications where I see trends.”

He noted that A&F’s nonpromotional stance, including not repeating last year’s 15-percent-off back-to-school direct mailer, has made interpretation of results difficult. He also said, although A&F’s men’s business remains difficult, he believed there is a strong fashion in women’s that could drive the business.

Still, Seth Johnson, chief operating officer, said last week that July’s sales results “reflect strong demand for spring-summer clearance and disappointing sales of full-price fall merchandise.”

For the first half, income rose 10.9 percent to $60.4 million, or 60 cents a diluted share, compared to income of $54.4 million, or 53 cents, in the comparable period last year. Sales rang in at $702.4 million, a 9.4 percent increase over year-ago sales of $641.9 million.
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