Abercrombie & Fitch (NYSE:ANF) provided investors with a bullish future outlook on sales and earnings growth at an analyst meeting held in April 2011. The company hopes to achieve these ambitious goals through growth overseas and in the direct to consumer segment.

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Fiscal 2010 Review
Abercrombie & Fitch reported total sales in fiscal 2010 (ended January 29, 2011) of $3.47 billion, with 73% of these sales from its U.S. store base. Another 15% sales were generated internationally, and 12% came from the direct to consumer segment. Abercrombie & Fitch reported GAAP net income of $1.67 per diluted share in fiscal 2010.

Comparable store sales grew nicely in fiscal 2010, ending the year up by 7%. Abercrombie & Fitch did better than many of its competitors in this metric.

Aeropostale (NYSE:ARO) reported only a 1% increase in comparable store sales in the fiscal year ending January 29, 2011, while American Eagle Outfitters (NYSE:AEO) reported a 1% decline in comparable store sales in the most recent fiscal year. Urban Outfitters (Nasdaq:URBN) reported a 2% decline in the final quarter of the most recent fiscal year.

Sales and Earnings Goals
Abercrombie & Fitch plans to grow earnings to $4.75 per share in fiscal 2012 (ends January 2013). The consensus earnings estimates for the company were at $3.97 per share just prior to the meeting. Abercrombie & Fitch also expects to reach sales in fiscal 2015 of $7.5 billion.

Abercrombie & Fitch is counting on better growth opportunities overseas, and will invest in increasing the number of International Flagship stores and Hollister locations in Asia and Europe.

Expansion Plans: International Flagship Stores and Hollister Europe
Abercrombie & Fitch currently has five International Flagship stores open, including two in Asia and three in Europe. During the current fiscal year, the company plans to double this store base, with locations in Paris, Madrid and several other select cities. Abercrombie & Fitch plans some aggressive expansion here over the next few years with a long-term goal of approximately 30 stores.

Another area of growth for Abercrombie & Fitch is in its Hollister brand in Europe. The company currently has 29 stores in four countries and has a long-term goal of increasing its store count to 185 across 15 countries.

Direct to Consumer and Domestic Stores
Abercrombie & Fitch is also counting on strong growth in direct-to-consumer or internet sales to meet its earnings goals. The company reported direct-to-consumer net merchandise sales of $352.5 million in fiscal 2010, and expects to increase this to $1 billion.

Abercrombie & Fitch is planning to shrink its store base in the United States and will close 50 locations during the current fiscal year. The company will also work to increase its U.S. store productivity with a goal of 90% of 2007 levels by 2012.

The Bottom Line
Abercrombie & Fitch promised the investment community strong growth in sales and earnings over the next few years, and expects to keep this promise through the expansion of its international store base and increased internet sales. (For related reading, also take a look at Analyzing Retail Stocks.)

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