Abercrombie & Fitch reported a fourth-quarter decline in net income to $83.1 million from $96.4 million in the year-ago period, though the company finished the year with momentum.
Net sales for the quarter ended Feb. 1 rose 3 percent to $1.18 billion from $1.15 billion in the year-ago period, while comparable sales rose 1 percent.
“We finished the year on a strong note, with record Black Friday week results contributing to net sales growth and positive comparable sales for the fourth quarter, and for the third consecutive year,” said Fran Horowitz, chief executive officer. “Consistent with recent trends, Abercrombie outperformed Hollister and the U.S. outperformed international, which although still lagging registered significant sequential improvement.
“Recent results reflect the significant progress we have made against our long-term initiatives, with 2019 marking the second full year of our growing while transforming phase. Over the past two years we have delivered a combined 157 new store experiences (store openings, relocations and renovations) reduced gross square footage by 6 percent, accelerated the rationalization of our flagship fleet and introduced local customer and product-facing teams in the EMEA and APAC regions. We have laid the groundwork, and remain confident in our long-term vision and the global opportunities available to us as we continue to evolve with our customer.
“In the near-term, we are actively monitoring and reacting to COVID-19, with the health and safety of our global employees, customers and partners remaining our top priority.”
The company has temporarily closed its Shanghai regional home office and its stores in mainland China and in and around Milan, Italy and is heeding global travel restrictions.
In its statement Wednesday, A&F said the APAC region contributed less than 10 percent of fiscal 2019 net sales, with mainland China and China’s Hong Kong Special Administrative Region combined representing roughly half of this contribution. Total company manufacturing exposure to China was 22 percent in fiscal 2019, down from 36 percent in fiscal 2018, and is planned to be in the low-teens for fiscal 2020. The company also reported that it has seen, and expects to continue to see, a direct impact to sales and margin from lost sales in the APAC region and in locations across Europe and North America. The company also anticipates impacts from potential disruption of product deliveries across the global supply chain.
For the year, net sales of $3.62 billion increased 1 percent and comparable sales rose 1 percent.
Net income was $45.96 million for 2019 versus $78.8 million in 2018.