A&F provides Q3 trading update with net sales down 12 percent

REPORT_ Abercrombie & Fitch has provided a business update on the company's performance for the third quarter ended November 1, 2014. Net sales for the third quarter decreased 12 percent to 911.4 million dollars, compared to net sales of 1.033 billion dollars for the prior year third quarter ended November 2, 2013.

Commenting on the update, Mike Jeffries, Chief Executive Officer of Abercrombie & Fitch, said, “We are clearly disappointed with our results for the third quarter. Continued weak store traffic was the primary contributor to the weak sales trend, particularly in Europe, where the environment there showed signs of further slowing. In addition, the decline in sales of heavy logo product weighed on the sales trend as we continued to reduce that element of our assortment in response to changing consumer preferences.”

Total comparable sales, including direct-to-consumer sales, decreased 10 percent with comparable US sales decreasing 7 percent and comparable international sales decreasing 15 percent. Total direct-to-consumer comparable sales increased 8 percent. Sales during the quarter were below expectations with comparable sales in September and October being significantly weaker than August. In addition, the company now expects modest gross margin rate erosion for the quarter compared to last year, given the highly promotional and challenging environment.

Excluding anticipated charges related to the impairment of store-related assets, store closures, the Gilly Hicks restructuring, the company's profit improvement initiative, and certain corporate governance matters, the company expects to report adjusted non-GAAP net income per diluted share for the third quarter in the range of 0.40 dollars to 0.42 dollars.

Company will report its third quarter results on Wednesday, December 3, 2014.