Abercrombie & Fitch Co. narrowed its second-quarter loss, but missed Wall Street’s estimates for sales.
For the three months ended Aug. 4, the company said the net loss was $3.9 million, or a loss of 6 cents a diluted share, against a net loss of $15.5 million, or 23 cents, a year ago. Excluding certain items, adjusted diluted earnings per share was 6 cents. Net sales rose 8.1 percent to $842.4 million from $779.3 million. The company said comparable sales rose 3 percent, with Hollister up 4 percent and Abercrombie up 2 percent.
Wall Street was expecting adjusted diluted EPS of 4 cents on revenues of $845.2 million. Investors weren’t happy with the numbers and sent shares of Abercrombie down 8.2 percent to $25 in pre-market trading at close to 8 a.m.
Fran Horowitz, chief executive officer, said, “Our results reflect another quarter of profit improvement fueled by comparable sales growth across both brands, gross margin expansion and expense leverage as we continue to execute our playbooks.”
She said Hollister posted another quarter of strong sales growth, while Abercrombie had its third consecutive quarter of positive comparable sales, led by strength in the U.S.
The ceo also noted that the company continues to “make tangible progress in our transformation efforts, and after a strong first half of the year, we remain on track to achieve our full-year 2018 expectations and our longer-term 2020 targets.”
The company said it expects comparable sales to be up in the range of 2 percent to 4 percent for fiscal 2018. It also guided net sales to rise in the range of 2 percent to 4 percent, noting that third-quarter sales are expected to be flat to last year, which includes the shift in the calendar and changes in foreign currency exchange rates. The calendar shift — the loss of 2017’s 53rd week — adversely impacted sales by $40 million, with the benefit in the first half offsetting the loss in sales in the second half, the company said.