abercrombie kids comparable store sales up

19 May '10

4 min read

Abercrombie & Fitch Co. reported unaudited results which reflected a net loss of $11.8 million and a net loss per basic and diluted share of $0.13 for the thirteen weeks ended May 1, 2010, compared to a net loss of $59.2 million and a net loss per basic and diluted share of $0.68 for the thirteen weeks ended May 2, 2009. Net loss for the thirteen weeks ended May 2, 2009 included a net loss per basic and diluted share of $0.41 from discontinued operations.

First Quarter Sales Highlights

• Total Company net sales, including direct-to-consumer net sales, increased 14% to $687.8 million
• Total Company domestic net sales, including direct-to-consumer net sales, increased 5% to $568.8 million
• Total Company international net sales, including direct-to-consumer net sales, increased 102% to $119.0 million
• Comparable store sales increased 1%
• Total Company direct-to-consumer net merchandise sales increased 42% to $68.8 million
• Abercrombie & Fitch net sales of $303.7 million; Abercrombie & Fitch comparable store sales increased 3%
• abercrombie kids net sales of $78.7 million; abercrombie kids comparable store sales increased 6%
• Hollister Co. net sales of $298.2 million; Hollister Co. comparable store sales decreased 2%

Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said:

“We are pleased with our overall reported sales growth of 14% for the quarter. We continue to be very focused on achieving sustainable, profitable growth in both our domestic and international businesses.”

First Quarter Financial Results
Net sales for the thirteen weeks ended May 1, 2010 increased 14% to $687.8 million from $601.7 million for the thirteen weeks ended May 2, 2009. Total Company direct-to-consumer net merchandise sales increased 42% to $68.8 million for the thirteen week period ended May 1, 2010. Total Company first quarter comparable store sales increased 1%.

The gross profit rate for the first quarter was 62.7%, 70 basis points lower than last year's first quarter gross profit rate. The decrease in gross profit rate was primarily driven by a 10% decrease in average unit retail. Adjusted for selling mix, the reduction in average unit retail was somewhat greater.

Stores and distribution expense, as a percentage of net sales, decreased to 51.5% from 54.9% for the first quarter. The decrease in the stores and distribution expense rate was primarily driven by lower store occupancy costs as a percentage of net sales.

Marketing, general and administrative expense for the first quarter was $96.6 million, a 12% increase compared to $86.3 million during the same period last year. The increase in marketing, general and administrative expense was primarily due to higher net legal expenses, incentive compensation and marketing expenses.

The tax rate for continuing operations for the first quarter was a benefit of 39.5% compared to a benefit of 28.9% during the same period last year. The tax rate associated with the loss from continuing operations for the first quarter of Fiscal 2010 included a modest net benefit from both the settlement of tax audits and the net release of valuation allowances.

Abercrombie & Fitch Co

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