- Prachi Singh |
Net sales for the first quarter at Abercrombie & Fitch were 730.9 million dollars, up 11 percent from last year, with comparable sales up 5 percent. Changes in foreign currency exchange rates and the calendar shift resulting from the 53rd week in fiscal 2017 benefited first quarter net sales by approximately 4 percent and 1 percent, respectively. By brand, net sales increased 13 percent to 423.6 million dollars for Hollister and 7 percent to 307.3 million dollars for Abercrombie from last year.
Commenting on the first quarter performance, Fran Horowitz, the company’s Chief Executive Officer, said in a statement: "Results exceeded our expectations driven by a 5 percent increase in comparable sales, gross margin expansion, and 460 basis points of expense leverage. Hollister continued to drive strong sales growth across channels and geographies and Abercrombie built momentum with another quarter of positive comparable sales led by strength in North America."
Abercrombie & Fitch’s net sales rise 10 percent in the US
By geography, net sales increased 10 percent to 449.1 million dollars in the US and increased 12 percent to 281.8 million dollars in international markets from last year. Direct-to-consumer net sales increased 14 percent to 200.7 million dollars from last year and were approximately 27 percent of total net sales for the quarter.
The gross profit rate was 60.5 percent, up 20 basis points from last year, and approximately flat on a constant currency basis, net of hedging. Operating loss was 42.2 million dollars compared to a loss of 69.9 million dollars last year. Excluding certain legal charges this year, adjusted non-GAAP operating loss was 36.6 million dollars. Net loss attributable to Abercrombie & Fitch Co. was 42.5 million dollars compared to 61.7 million dollars last year. Excluding the after-tax effect of certain legal charges, adjusted non-GAAP net loss attributable to Abercrombie & Fitch Co. was 38.4 million dollars.
FY18 comparable sales expected to rise between 2 percent to 4 percent
For fiscal 2018, the company now expects comparable sales as well as net sales to be up in the range of 2 percent to 4 percent, with net sales in the second quarter to be up high-single digits, including benefits from changes in foreign currency exchange rates and the calendar shift. Changes in foreign currency exchange rates to benefit net sales by approximately 50 million dollars, including approximately 25 million dollars in the first quarter, and operating income by approximately 15 million dollars.
Gross profit rate expected to be up slightly from the fiscal 2017 rate of 59.7 percent. The company plans to open 22 full-price stores in fiscal 2018, including 13 Hollister and nine Abercrombie stores. In addition, the company anticipates closing up to 60 stores in the US during the fiscal year through natural lease expirations.
On May 22, 2018, the Board of Directors declared a quarterly cash dividend of 0.20 dollar per share on the Class A Common Stock of Abercrombie & Fitch Co.
Picture:Abercrombie & Fitch website