By  on March 2, 2017
A line at Hollister.

Shares of Abercrombie & Fitch Co. rose 15.1 percent in early afternoon trading, helped by a surprise comparable-store sale improvement from Hollister even though the company missed fourth-quarter EPS and sales estimates.Net income for the quarter ended Jan. 28 fell 15.5 percent to $48.8 million, or 71 cents a diluted share, from $57.7 million, or 85 cents, a year ago. Net sales declined 6.9 percent to $1.04 billion from $1.11 billion.Wall Street was expecting EPS of 75 cents on net sales of $1.05 billion.Comparable-store sales for the company were down 5 percent. By brand, comps for Abercrombie were down 13 percent, but the surprise was a 1 percent comps gain for Hollister during what was a challenging holiday selling season. The company said direct-to-consumer and omnichannel sales grew to 31 percent of total net sales for the quarter, compared with 28 percent of net sales a year ago.Further, gross profit rate for the quarter was 59.3 percent. Excluding certain year-ago items, the company said gross profit fell 90 basis points on a constant currency basis due mostly to lower average unit retail that was partially offset by lower average unit cost.Fran Horowitz, chief executive officer, said, “Results for the quarter reflect a still challenging and competitive retail environment, however we continue to make progress on our strategic priorities.”Another high point for the company was that international markets improved from the last quarter, for both the Abercrombie and Hollister brands. Horowitz said that the direct-to-consumer business continued to deliver positive comps in both the U.S. and international markets.The ceo noted that 2016 was a “year of significant progress on each of our strategic priorities. We continued to proactively respond to the evolving retail landscape through our store closure and channel optimization initiatives. We also stayed close to our customers to understand what inspires them, which helped inform our planning and executions.”She added that the company had begun to communicate “evolved identities for each of our brands,” as well as improvements to the customer experience through the roll out of store remodels.As for 2017, she said that the environment is “likely to remain challenging,” and emphasized that the retailer “has a strong balance sheet and continues to aggressively manage costs in order to continue our investments in strategies to provide our customers with compelling new experiences through a clearly defined brand voice, to position our business for sustainable growth.”Shares of Abercrombie were trading at $13.45 at 12:25 p.m.

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