The teen angst that has been shadowing Abercrombie & Fitch hasn’t yet abated.
A&F posted fourth-quarter results that saw declines in both sales and profits. For the three months ended Jan. 31, net income fell 32.9 percent to $44.4 million, or 63 cents a diluted share, from $66.1 million, or 85 cents, a year ago. On an adjusted basis, excluding certain charges, net income was $80.8 million, or $1.15 a diluted share, versus $104.3 million, or $1.34, a year ago. Net sales slipped 13.8 percent to $1.12 billion from $1.30 billion.
Investors were not happy with the results, sending shares of A&F down 12.1 percent in mid-day trading to $21.09.
Arthur Martinez, executive chairman, saw one ray of hope, noting that the declines in the logo business are expected to neutralize in the second half of the year.
Martinez said that “2014 was a year of significant change for Abercrombie & Fitch. I believe these changes put us on the right path to improve profitability and deliver value to shareholders. Our 2015 priorities are clear.”
He explained those priorities as needing first to improve comparable-store sales trends, strategic investment in direct-to-consumer and omni-channel, as well as finding ways to reduce
Currently, the company sees the declines in the logo business continuing, but as a reduced rate. The expectation is that the declines will neutralize in the back half of the year, Martinez noted.