By brand, net sales for the second quarter increased 6 per cent to $446.6 million for Hollister and decreased 8 per cent to $332.7 million for Abercrombie over last year. In the US, net sales for the second quarter decreased 2 per cent to $470.3 million in and increased 2 per cent to $309.0 million in international markets over last year. Direct-to-consumer sales grew to approximately 24 per cent of total company net sales for the second quarter, compared to approximately 23 per cent of total company net sales last year.
The gross profit rate for the second quarter was 59.1 per cent. Net other operating income for the second quarter was $2.8 million, compared to net other operating income of $13.1 million last year. Excluding benefits last year of $12.3 million related to the settlement of certain economic loss claims, net other operating income increased $2.0 million, primarily due to foreign currency related gains. The company's marketing, general and administrative expense for the second quarter was $109.4 million, down from $111.7 million last year, primarily due to expense reduction efforts, partially offset by higher marketing expense.
The company ended the quarter with $421.9 million in cash and cash equivalents, and gross borrowings under the company's term loan agreement of $268.3 million, compared to $455.6 million in cash and cash equivalents and $293.3 million in borrowings last year.
"We are encouraged by the clear progress across all brands. Through aggressive execution of our strategic plan, we delivered our third consecutive quarter of sequential comparable sales improvement. Hollister continues to build on its strong foundation, leveraging higher levels of customer engagement to drive growth across all touchpoints, and demonstrates how the customer responds when product, brand voice and brand experience are aligned. Abercrombie showed continued improvement in the areas we expected, as we brought better balance to the assortment throughout the quarter, and continued to apply the learnings from Hollister's successes. Our focus remains on staying close to our customers and investing in our ability to meet their needs whenever, wherever and however they choose to engage with our brands," Fran Horowitz, chief executive officer, said.
"While we expect the environment to remain challenging and promotional in the second half, we expect to see benefits from the continued improvement in product assortment, our strategic investments in marketing and omnichannel, and our ongoing efforts to optimise productivity across all channels. We are confident we are on the right path to deliver enhanced performance and long term shareholder value," concluded Horowitz. (RR)
Fibre2Fashion News Desk – India
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