"Trends improved throughout the second quarter, enabling us to deliver constant currency revenue growth and meet our previously-issued comp and gross profit rate outlook, while continuing to tightly manage expenses. Importantly, we have had a solid start to back-to-school in the U.S. and we look forward to building on that momentum in the back half through exciting product and cohesive marketing campaigns, said Fran Horowitz, chief executive officer of Abercrombie & Fitch in a company press release.
"While we are committed to delivering near-term results, we remain keenly focused on our long-term goals as we execute on our transformation initiatives. In the second quarter, we delivered 26 new store experiences, closed our Hollister SoHo flagship store in NYC, realised double digit digital sales growth, continued our investments in key personalisation tools, and grew our loyalty membership accounts across brands. We plan to build on these actions as we continue to lay the foundation to achieving our fiscal 2020 target."
For fiscal 2019, the company expects the net sales to be in the range of flat to up 2 per cent, driven by comparable sales and net new store contribution, partially offset by an adverse impact from changes in foreign currency exchange rates of approximately $45 million of which approximately $26 million has been reflected in year-to-date results.
Comparable sales is expected to be in the range of flat to up 2 per cent against positive comparable sales of 3 per cent last year. Gross profit rate to be down in the range of 50 to 90 basis points from the fiscal 2018 rate of 60.2 per cent, reflecting a combined adverse impact from changes in foreign currency exchange rates and anticipated China tariffs of approximately 60 basis points.
For the third quarter of fiscal 2019, the company expects the net sales to be up approximately 1 per cent against positive comparable sales of 3 per cent last year. Gross profit rate to be down approximately 100 basis points as compared to fiscal 2018 rate of 61.3 per cent, reflecting a combined adverse impact from changes in foreign currency exchange rates and anticipated China tariffs of approximately 90 basis points.
Abercrombie & Fitch is a leading, global specialty retailer of apparel and accessories for men, women and kids through three renowned brands. (PC)
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