ABERCROMBIE & FITCH MEETS FOURTH QUARTER EXPECTATIONS

Ohio-based lifestyle brand Abercrombie & Fitch Co. today reported GAAP net income per diluted share of $0.85 for the fourth quarter ended January 30, 2016, compared to $0.63 for the fourth quarter last year. Excluding certain items, the company reported adjusted non-GAAP net income per diluted share of $1.08 for the fourth quarter, compared to $1.15 for the fourth quarter last year.

In addition, the company reported GAAP net income per diluted share of $0.51 for the full year, compared to $0.71 for the full year last year. Excluding certain items, the company reported adjusted non-GAAP net income per diluted share of $1.12 for the full year, compared to $1.54 for the full year last year.
Net sales for the fourth quarter of $1.113 billion were up 2% on a constant currency basis, but down 1% on a reported basis over last year. Comparable sales for the fourth quarter increased 1%. The gross profit rate for the fourth quarter was 60.8%. Direct-to-consumer and omnichannel sales grew to approximately 28% of total company net sales for the fourth quarter, compared to approximately 27% of total company net sales last year.

“We were pleased to deliver results in line with our expectations against the backdrop of a challenging environment that included currency, traffic and weather headwinds,” said Arthur Martinez, the company’s executive chairman. “Our results for the fourth quarter reflect continued progress on a number of fronts and included a return to positive comparable sales, higher average unit retails as promotional activity was moderated, and meaningful improvement in adjusted operating income on a constant currency basis. In addition, inventory continued to be well managed and we generated strong free cash flow for the year. As we look ahead to 2016, it is likely to remain a challenging environment, but we believe we are on the right track and we will continue to focus on delivering a customer-centric shopping experience and compelling assortments based on clearly defined brand positions.”

The company plans to open approximately 15 full-price stores in fiscal 2016, including approximately 10 in international markets, primarily China, and approximately five in the U.S. The company also plans to open approximately 10 new outlet stores, primarily in the U.S. In addition, the company anticipates closing approximately 60 stores in the U.S. during the fiscal year through natural lease expirations.