Written by StockNews.com
Abercrombie & Fitch Co. (NYSE: ANF) early Thursday [Mar 2, 2017 | 7:36am] posted weaker than expected fourth quarter earnings results, as comparable sales plunged by a remarkable rate at its namesake stores.
The New Albany, OH-based clothing retailer reported Q4 earnings per share (EPS) of $0.71, which was $0.06 worse than the Wall Street consensus estimate of $0.77.
Revenues fell 6.9% from last year to $1.04 billion, also missing analysts’ view for $1.05 billion.
ANF noted that same-store sales (“comps”) across all of its stores fell 5% in the latest period. Abercrombie’s namesake stores same a huge 13% drop in comps, while Hollister brand stores saw a modest increase of 1%. Same-store sales are considered a key indicator of a retailer’s health, since they only take into account the year-over-year sales performance of stores open at least 12 months.
Direct-to-consumer and Omni-channel sales rose to approximately 31% of the company’s total net sales in Q4, compared with about 28% in the year-ago quarter.
The company’s gross profit rate slipped to 59.3% in the fourth quarter, a decrease of 90 basis points.
Looking ahead, ANF said it expects comparable sales to improve in 2017. It also continues to aggressively cut costs in the face of waning sales.
The company commented via press release:
“While overall results did not meet expectations, 2016 was a year of significant progress on each of our strategic priorities. We continued to proactively respond to the evolving retail landscape through our store closure and channel optimization initiatives. We also stayed close to our customers to understand what inspires them, which helped inform our planning and execution. We began to communicate evolved identities for each of our brands, and made improvements to the customer experience through the roll out of store remodels, and ongoing investments in direct-to-consumer and omnichannel capabilities across both brands.
While the environment is likely to remain challenging in 2017, we have a strong balance sheet and continue to aggressively manage costs in order to continue our investments in strategies to provide our customers with compelling new experiences through a clearly defined brand voice, to position our business for sustainable growth.”
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