Joanne Crevoiserat, chief financial officer and executive vice president, told investors at the Telsey Advisory Group Spring Consumer Conference Tuesday that, “There is much work ahead.”
“While we expect the environment to remain challenging, we are encouraged by our progress and believe that the many changes we are making will allow us to realize the full potential of our brand,” Crevoiserat said.
The retailer expects flat to slightly positive comparable sales this year, with continued headwinds from foreign currency and a temporary hit from the closure of Hollister stores for remodeling.
That would mark an improvement from a comp sales decline of 3 percent last year. Net sales fell 6 percent to $3.52 billion, while net profits declined 31 percent to $35.6 million.
In the stores, the company has worked toward an easier, faster and more engaging experience, giving store managers improved training and more autonomy to better sync up with the shopper.
“This focus on the customer remains central to our strategy as we move forward,” she said. “We are gaining traction, but in many respects, we are still learning and have a long way to go.”
The effort continues this year with new brand positioning for both Abercrombie and Hollister.
“In an intensive effort, over the past six months, we have mapped out the core beliefs and convictions that drive each brand,” Crevoiserat said. “We’re now working on communication strategies surrounding these brand positionings and expect that to roll out over the course of this year. We expect this to be a multifaceted effort that will be incorporated in our products, in the in-store and online experience and through our marketing. And it will not happen all at once, but we would expect you to see it gradually over time, beginning in the back half of the year.”
About 60 Hollister stores will be remodeled this year and a new Abercrombie prototype store is in the works.
The company has 933 stores, about 81 percent of which are in the U.S., and has been actively remaking that fleet.
The company’s closed 340 stores over the past six years and expects to shut another 60 this year.
Crevoiserat said the firm also has significant lease flexibility, with more than 50 percent of its U.S. leases expiring over the next two fiscal years.