Home / Knowledge / News / Apparel/Garments / Abercrombie & Fitch Q2 results fail to meet expectations
Abercrombie & Fitch Q2 results fail to meet expectations
16
Aug '12
Abercrombie & Fitch Co. reported unaudited results which reflected net income of $15.5 million and net income per diluted share of $0.19 for the thirteen weeks ended July 28, 2012, compared to net income of $32.0 million and net income per diluted share of $0.35 for the thirteen weeks ended July 30, 2011. 

Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said: "The second quarter results we are reporting today are disappointing and below our expectations coming into the quarter. In particular, we saw a further deceleration in the trend in our international stores, while our U.S. chain stores also comped negatively for the quarter for the first time since 2009. Our direct to consumer business remained a bright spot, posting its tenth successive quarter with growth of 25% or better.

Our entire organization is completely focused on improving upon the trends we have seen. There are factors beyond our control but, as a team, we believe there are opportunities to do better. We continue to be confident in the global appeal of our iconic brands. This was once again affirmed by the tremendous reception our Hong Kong flagship received at its opening this past Saturday. We remain excited and optimistic about the opportunities ahead of us, and we will be disciplined and judicious in our use of our shareholders' capital to pursue those opportunities."

Second Quarter Summary

Net sales for the thirteen weeks ended July 28, 2012 increased 4% to $951.4 million from $916.8 million for the thirteen weeks ended July 30, 2011. Total U.S. sales, including direct-to-consumer sales, decreased 5% to $648.0 million. Total international sales, including direct-to-consumer sales, increased 31% to $303.4 million. Total Company direct-to-consumer sales, including shipping and handling, increased 25% to $127.7 million.

Total comparable store sales for the quarter decreased 10% relative to last year. By brand, comparable store sales decreased 11% for Abercrombie & Fitch, 10% for abercrombie kids, and 10% for Hollister Co. Total sales by brand were $362.5 million for Abercrombie & Fitch, $76.3 million for abercrombie kids and $485.6 million for Hollister Co.

The gross profit rate for the second quarter was 62.5%, 110 basis points lower than last year's second quarter gross profit rate. The decrease in the gross profit rate was driven by an increase in average unit cost and the adverse effect of exchange rates, partially offset by an international mix benefit. 

Stores and distribution expense, as a percentage of net sales, increased to 48.1% from 46.4% for the second quarter of last year. The increase in the stores and distribution rate was primarily the result of deleveraging on negative comparable store sales.   

Marketing, general and administrative expense for the second quarter was $111.3 million, compared to $110.0 million during the same period last year. The increase in marketing, general and administrative expense was due to increases in marketing expense, IT expense, travel and other expenses, largely offset by a decrease in incentive compensation expense. 


Must ReadView All

Textiles | On 22nd Jul 2017

Govt constitutes GST Feedback and Action Room

The Government of India has constituted a Feedback and Action Room...

Textiles | On 22nd Jul 2017

India’s cotton textile exports fell in FY17: Tamta

The overall export of cotton textiles from India declined in 2016-17...

Textiles | On 22nd Jul 2017

Stella McCartney, Bolt Threads partner for eco fashion

Fashion designer Stella McCartney has partnered with Bolt Threads for ...

Interviews View All

Cindy McNaull
Cordura

We have broad range of options in durable fabrics

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Shiladitya K Joshi
Truetzschler India Private Limited

India ITME provides a platform to interact with our stakeholders

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search



X