On Thursday, May 28, Abercrombie & Fitch Co. (NYSE/ANF) released its financial results for the quarter ended May 2, 2015. (Source: Abercrombie & Fitch, May 28, 2015.)
Abercrombie & Fitch is an American retailer headquartered in New Albany, Ohio. The company focuses on casual wear for young consumers.
Sales Down, Net Loss
The results are dismal. Net loss for the quarter is $63.2 million, translating into a loss of $0.91 per share. In the same quarter last year, the loss was $0.32 per share.
Excluding certain one-time items, adjusted net loss is still at $37.2 million, with an adjusted loss per share of $0.53.
The company has a total of 962 stores worldwide, with 789 of them in the U.S. In this quarter, A&F opened three stores in the U.S. and three internationally. The company also closed 13 stores in the U. S. Among its expenses, stores and distribution expense includes $4.7 million of charges primarily related to lease termination and store closure costs.
A&F has been struggling in its sales. Net sales plunged 14% in the first quarter to $709.4 million. The company says that foreign exchange rates are responsible for six percent of the 14% decline. Sales at existing stores dropped eight percent.
The drop in sales reflects an 11% decline in domestic sales and a more dramatic 18% drop in international sales.
Abercrombie & Fitch Future Expectations
For the future, A&F expects continued headwinds from foreign exchange rates. On the bright side, management expects continued sequential improvement in comparable sales in the remaining quarters of this year. Operating expense is expected to be lowered by about $40.0 million year-over-year.
The outlook was good enough for investors on Thursday, May 28, as shares of A&F closed nearly 10% higher at $22.10. However, the upward momentum was not strong enough, as the shares fell more than six percent to $20.59 on the following day.