Abercrombie & Fitch, impacted by challenges overseas, reported that its bottom line declined to $6.32 million in the third quarter ended Nov. 2, from $23.91 million in the year ago quarter.
Net sales of $863.5 million were almost flat on a reported basis and up 1 percent on a constant currency basis as compared to last year. Comparable sales were also approximately flat.
In the U.S., the Hollister and Abercrombie divisions combined posted a 3 percent comparable sales gain. This was offset by international comps of negative 8 percent.
Overall operating income was $14.5 million, compared to $39.7 million a year ago. Operating income on an adjusted non-GAAP basis, which excludes pre-tax flagship store asset impairment charges this year and legal benefits last year, was $24.9 million, down from $36.7 million a year ago, reflecting the adverse impact of changes in foreign currency exchange rates of $5 million.
On a diluted share basis, net income came to $0.10 compared to $0.35 in the year-ago period.
“We achieved another quarter of constant currency revenue growth and positive U.S. comps across brands, while maintaining tight expense management,” said chief executive officer Fran Horowitz. “Continued U.S. momentum was offset by challenges across several of our key international markets as well as a complicated global operating environment, which weighed on overall results. Despite these challenges, we ended the quarter with a balanced inventory position and have seen good response to our new assortments as weather has turned more seasonal, giving us confidence in our product and messaging for the important holiday period.
“While we are focused on the upcoming holiday season, we also continue to make progress against our long-term transformation initiatives including delivering 34 new store experiences, keeping us on track for our goal of 85 for the year, continuing the global rollout of omni capabilities and new payment options and building our customer and product-facing teams in the EMEA and APAC regions. These transformation initiatives, along with accelerating top line growth, are essential to achieving our 2020 profitability target.”
New store experiences include opening, relocating, renovating or resizing stores.
For the fourth quarter of fiscal 2019, the company expects net and comparable sales in the range of flat to up 2 percent, reflecting an adverse impact from changes in foreign currency exchange rates of about $5 million.
For 2019, the company expects net and comparable sales to be flat to up 1 percent.