With Abercrombie & Fitch
Retailer Limited
In its most recent results, the company's fourth-quarter sales increased a not-so-earth-shattering 13% to $206.8 million. However, this is a substantial improvement from the same results a year ago where revenues inched up a paltry 1.4%. Likewise, this quarter's same-store sales increased 5% versus the 6% decrease in comparables last year. While its revenue growth for the period may not be the recipient of tween screams like those given to boy band singers Aaron Carter or Jesse McCartney, its net income climbed the charts to a platinum 32% growth to $23.3 million.
Too's strong quarterly earnings played a major role in the company's fiscal 2004 net income that rocketed up 83.2% to $41.4 million ($1.18 in earnings per share). Vastly improved operating margins of 9.5% -- 26.7% betterment over a year ago -- were also a key factor in the earnings growth.
The question is whether Too can maintain traction and continue to accelerate sales and earnings going into 2005, or is its recent success a one-hit wonder? With fiscal 2004 sales growth of 13%, Too will need sustained growth in order to support its stock valued at 22 times earnings. Given its inconsistency over the past five years, Too will have to prove the latest results were not a fleeting fad like the New Kids on the Block.
Too has a good concept, so stay tuned. But wait for a series of multiplatinum results before crowning it the Queen of Tween and worthy of your hard-earned dollars.
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Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.