Abercrombie & Fitch Co. reported unaudited results that reflected a GAAP net loss of $23.7 million and net loss per basic and diluted share of $0.32 for the thirteen weeks ended May 3, 2014, compared to a GAAP net loss of $7.2 million and net loss per basic and diluted share of $0.09 for the thirteen weeks ended May 4, 2013.
Excluding charges related to the Gilly Hicks brand restructuring, the Company's profit improvement initiative, and certain corporate governance matters, the Company reported an adjusted non-GAAP net loss of $13.0 million and net loss per basic and diluted share of $0.17 for the quarter.
Mike Jeffries, Chief Executive Officer, said, "In what remains a difficult teen retail environment, we are pleased that earnings for the quarter were in line with our expectations. Overall sales for the quarter decreased 2%, which included strong growth in our direct-to-consumer business. In addition, comparable sales continued to head in the right direction, and included significant sequential improvement in our female business and our Abercrombie & Fitch brand as a whole.
"We remain focused on returning to growth, and believe we are taking the right steps and are on course to accomplish that goal. As we look forward to the rest of 2014, we have made significant improvements throughout the organization to better align us for success, and we are energized by the opportunities ahead of us."
Additional First Quarter Results Commentary
The gross profit rate for the first quarter was 62.2%, 370 basis points lower than last year, reflecting a higher mix of fall merchandise clearance selling versus last year and an increase in promotional activity.
Stores and distribution expense for the first quarter was $417.6 million, down from $449.1 million last year. The stores and distribution expense rate for the quarter was 50.8% of net sales, down 270 basis points from last year, driven primarily by savings in store payroll partially offset by higher direct-to-consumer expense and $0.8 million of charges related to the profit improvement initiative.
Marketing, general and administrative expense for the first quarter was $123.6 million, a 4% increase compared to $118.8 million last year. Marketing, general and administrative expense for the quarter included $2.3 million of charges related to the profit improvement initiative and $6.9 million of charges related to certain corporate governance matters. Excluding those charges, marketing, general and administrative expense was $114.4 million, a 4% decrease compared to last year. A decrease in compensation expense was partially offset by an increase in marketing expense.