Clothing retailer Abercrombie & Fitch's earnings rose 23 per cent in the latest quarter, beating Wall Street's expectations, but the company released a third-quarter earnings target that falls short of analysts' current views.

In the second quarter ended July 31, the New Albany-based retailer earned USD42.9 million, or 44 cents per share, on revenue of USD401.3 million. In the same period last year, it earned USD34.8 million, or 35 cents per share, on revenue of USD355.7 million. Analysts were expecting earnings of 43 cents per share in the latest quarter, according to Thomson First Call.

Sales at stores open more than one year fell five per cent for the quarter, but total sales climbed 13 per cent from a year earlier. In a statement, chairman and chief executive Mike Jeffries said despite the "difficult sales trend," growth in profit margins led to the quarter's gains. Gross margins rose to 45.2 per cent from 40.6 per cent in the 2003 quarter.

The clothing company that caters to teens and young adults believes its third-quarter earnings should be similar to results in the year-earlier period, as long as second-quarter sales trends continue.