Abercrombie & Fitch (ANF) Q1 Net Income Drops 88%; Outlook Weighs

♫"We like stocks that are Abercrombie & Fitch..."♪

According to news out Wednesday, investors are definitely not humming that catchy LFO tune. Abercrombie & Fitch (NYSE: ANF) is getting hit amid a first-quarter 2012 beat, but tepid outlook.

Revenue at the clothier popped 10.1 percent in the quarter to $921.22 million at the end of April, compared with views calling for $951.33 million. Comps fell 5 percent in the quarter.

Net income fell 88 percent to $2.99 million, or 3 cents per share, besting expectations calling for 2 cents in earnings.

Gross margin fell 240 basis points to 62.6 percent, driven by an increase in average unit cost.

Looking ahead, Abercrombie sees 2012 comps down by a mid-single digit percentage. The retailer affirmed its EPS outlook, but said results would come from better gross margins offsetting lower sales.

Shares are 7.2 percent lower Wednesday in early trading.

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