- Prachi Singh |
Abercrombie & Fitch has reported a GAAP net loss per diluted share of 0.59 dollar for the first quarter ended April 30, 2016, compared to a GAAP net loss per diluted share of 0.91 dollar, or an adjusted non-GAAP loss per diluted share of 0.53 dollar, for the first quarter last year. Net sales for the first quarter of 685.5 million dollars were down 3 percent over last year, with comparable sales for the first quarter down 4 percent.
“Our results for the quarter reflect significant traffic headwinds, particularly in international markets and in our US flagship and tourist stores, resulting in negative comparable sales. However, in the face of these headwinds, we were encouraged by our US business, where comparable sales improved in the Hollister brand, and gross margin rate increased meaningfully for both brands,” said Arthur Martinez, Executive Chairman of the company.
First quarter sales declined 3 percent
By brand, net sales decreased 5 percent to 323.3 million dollars for Abercrombie and decreased 2 percent to 362.1 million dollars for Hollister over last year.
By geography, net sales decreased 5 percent to 425.4 million dollars in the US and were approximately flat at 260.1 million dollars in international markets over last year. Direct-to-consumer and omnichannel sales grew to approximately 24 percent of total company net sales for the quarter, compared to approximately 23 percent of total company net sales last year.
Operating loss was 54.9 million dollars, compared to 90.2 million dollars for the first quarter last year. Net loss attributable to Abercrombie & Fitch was 39.6 million dollars compared to 63.2 million dollars for the first quarter last year.
Announces cash dividend of 0.20 dollar
As previously announced, on May 20, 2016 the Board of Directors declared a quarterly cash dividend of 0.20 dollar per share on the Class A Common Stock of Abercrombie & Fitch.
For fiscal 2016, the company now expects comparable sales to remain challenging in the second quarter, but to improve in the second half of the year.
Adverse effects from foreign currency on sales are expected to be approximately 10 million dollars. A gross margin rate is expected to be up slightly to last year's rate of 61.9 percent, but down modestly in the second quarter. The company plans to open approximately 15 new stores in fiscal 2016, including approximately 10 in international markets, primarily China, and approximately five in the US. The company now plans to open six new outlet stores, primarily in the US. In addition, the company anticipates closing up to 60 stores in the US during the fiscal year through natural lease expirations.