Abercrombie Sales Drop
Published: May 29, 2015
Abercrombie Sales Drop, Abercrombie & Fitch Co. (ANF), a specialty retailer of casual apparels, Thursday said its loss for the first quarter widened from the prior year, as sales declined 14 percent owing partly to adverse currency. However, the company witnessed sequential improvements in several areas during the quarter, sending the stock up nearly 5 percent in pre-market activity.
Arthur Martinez, executive chairman, said, “We knew the first quarter was going to be difficult due to a number of factors, both internal and external and, most significantly, because many of the actions we are taking to improve our business are in the early stages of implementation and have not yet been fully realized.”
Martinez added that the retailer did see sequential improvements in several areas during the quarter, most notably within Hollister, and the comparable sales trend has continued to improve in May.
Net loss for the quarter widened to $63.25 million or $0.91 per share from $23.67 million or $0.32 per share in the prior year.
Excluding certain charges, the company reported a net loss of $0.53 per share, while the loss totaled $0.17 per share last year.
On average, 33 analysts polled by Thomson Reuters expected the company to report a loss per share of $0.34 for the quarter. Analysts’ estimates typically exclude special items.
Net sales decreased 14 percent to $709.42 million from $822.43 million, driven by a comparable sales decline of 8 percent and an adverse effect from changes in foreign currency exchange rates of 6 percent. Analysts expected revenue of $730.91 million for the quarter.
Sales dropped 12 percent each in Abercrombie and Hollister brands, where comparable sales decline was 9 percent and 6 percent, respectively.
Net sales decreased 11 percent to $448.9 million in the U.S. and comparable sales declined 7 percent.
Internationally, net sales were 18 percent lower at $260.5 million and comparable sales decreased 9 percent.
Gross profit rate for the quarter dropped 420 basis points to 58 percent. Excluding certain charges, the gross profit rate was up 70 basis points at 61.8 percent, on a constant currency basis, primarily due to lower average unit cost.
The company expects continued headwinds from foreign currency exchange rates for the year.
The stock closed down 2.3 percent on Thursday at $19.65, but added 4.9 percent in pre-market activity.
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