Abercrombie & Fitch Co., managing through the COVID-19 riddled economy with strong expense controls and robust digital growth, reported fourth-quarter net income came in at $82.4 million, or $1.27 a share, slightly under the $83.1 million, or $1.29 a share, posted in the year-ago period.
Operating income came to $116 million in the quarter ended Jan. 30, compared to $122 million in the year-ago period. On an adjusted basis operating income was $131 million last year, compared to $125 million in the year-ago period.
Net sales were down 5 percent to $1.1 billion last quarter, from $1.18 billion in the year-ago quarter.
By division, Hollister sales were down 8 percent last quarter to $655.4 million from $710.5 million a year ago. Abercrombie’s sales were down 2 percent to $466.6 million from $474 million in the 2019 period.
“I am proud of our execution in the fourth quarter, where we exceeded initial internal expectations,” said Fran Horowitz, chief executive officer. “We listened and remained close to our customer, adjusting our product and messaging to align with their new reality. We drove 34 percent digital sales growth, expanded gross profit rate by 230 basis points and reduced operating expense during the fourth quarter.
For all of last year, A&F lost $114 million, compared to a profit of $39.4 million in 2019.
Net sales last year reached $3.1 billion, down 14 percent compared to $3.6 billion in 2019.
“For the year, we made significant progress on our key transformation initiatives,” Horowitz said. “We leaned into our infrastructure to grow digital to 54 percent of annual revenues while utilizing our lease flexibility to take approximately 1.1 million gross square feet, or 17 percent, out of our base, including eight tourist-dependent flagships. At the same time, we continued to make strategic investments to support future growth including opening smaller, more omni-enabled experiences; adding senior level talent in key areas including marketing, data and analytics and digital, and further building-out regional teams in EMEA and APAC. We remain focused on controlling what we can control and ended 2020 even stronger than we started.
“As we enter 2021, we are pleased with our start to the first quarter and have proven strategies in place to build on recent successes in product, marketing and digital,” Horowitz added. “Our solid foundation and strong liquidity position enable us to be on the offense as we continue to focus on profitable topline growth, square footage optimization, digital transformation and global market share gains. While the landscape remains uncertain, I am excited about the future and more confident than ever in our ability to drive sustainable long-term operating margin expansion.”