- Prachi Singh |
Abercrombie & Fitch has reported a net loss per diluted share of 0.91 dollar for the first quarter ended April 29, 2017 compared to 0.59 dollar for the first quarter ended April 30, 2016. In addition, the company reported an operating loss of 69.9 million dollars, which included the adverse impact from year-over-year changes in foreign currency exchange rates of approximately 5.3 million dollars, compared to an operating loss of 54.9 million dollars last year.
Commenting on the company’s results, Fran Horowitz, Chief Executive Officer, said in a statement, "We are encouraged by our progress across all brands, particularly in March and April as a whole, in an aggressively promotional environment. While we anticipate the second quarter environment to remain promotional, we expect results to improve further in the second half of the year, as we see returns from our strategic investments in marketing and omnichannel."
First quarter net sales were down 4 percent
Net sales for the first quarter of 661.1 million dollars were down 4 percent over last year, with comparable sales down 3 percent. By brand, net sales for the quarter increased 3 percent to 374.7 million dollars for Hollister and decreased 11 percent to 286.4 million dollars for Abercrombie versus last year.
By geography, net sales decreased 4 percent to 409.1 million dollars in the US and decreased 3 percent to 252 million dollars in international markets versus last year. Direct-to-consumer sales grew to approximately 27 percent of total company net sales for the first quarter, compared to approximately 24 percent of total company net sales last year.
The gross profit rate was 60.3 percent, 130 basis points lower than last year on a constant currency basis, primarily due to lower average unit retail, partially offset by lower average unit cost. Net loss attributable to Abercrombie & Fitch Co. was 61.7 million dollars compared to 39.6 million dollars last year.
Dividend of 0.20 dollar per share approved
As previously announced, on May 19, 2017 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, payable on June 12, 2017 to stockholders of record at the close of business on June 2, 2017.
For fiscal 2017, the company expects comparable sales to remain challenging in the second quarter, with trend improvement in the second half of the year, continued adverse impact from foreign currency on sales and operating income, a gross margin rate down slightly to last year's adjusted non-GAAP rate of 61 percent, with continued pressure in the second quarter, net income attributable to non-controlling interests of approximately 4 million dollars.
The company plans to open seven full-price stores in fiscal 2017, primarily in the US. The company also plans to open two new outlet stores. In addition, the company anticipates closing approximately 60 stores in the US during the fiscal year through natural lease expirations.