Ohio-based lifestyle brand Abercrombie & Fitch has reported another quarter of sales decline, citing a challenging and competitive retail environment.
Net sales for the fourth quarter of $1.036 billion were down 7 percent from last year, with comparable sales for the fourth quarter down 5 percent.
By brand, net sales for the fourth quarter decreased 13 percent to $442.4 million for Abercrombie and decreased 2 percent to $594 million for Hollister from last year. By geography, net sales for the fourth quarter decreased 8 percent to $688.2 million in the U.S. and decreased 5 percent to $348.2 million in international markets from last year.
“Results for the quarter reflect a still challenging and competitive retail environment, however we continue to make progress on our strategic priorities,” said Fran Horowitz, Chief Executive Officer. “Hollister, our largest brand, achieved positive comp sales and the Abercrombie brand renewal continues, although it is a work in progress. International markets improved measurably from last quarter, for both Abercrombie and Hollister brands, and the direct-to-consumer business continued to deliver positive comparable sales in both the U.S. and international markets. However, the competitive environment resulted in more promotional activity and a lower gross margin rate than planned.”
The company also reported net sales for the full year of $3.327 billion were down 5 percent from last year, with comparable sales for the full year down 5 percent.
By brand, net sales for the full year decreased 9 percent to $1.487 billion for Abercrombie and decreased 2 percent to $1.840 billion for Hollister from last year.
By geography, net sales for the full year decreased 7 percent to $2.124 billion in the U.S. and decreased 3 percent to $1.203 billion in international markets from last year.
Horowitz continued: “While overall results did not meet expectations, 2016 was a year of significant progress on each of our strategic priorities. We continued to proactively respond to the evolving retail landscape through our store closure and channel optimization initiatives. We began to communicate evolved identities for each of our brands, and made improvements to the customer experience through the roll out of store remodels, and ongoing investments in direct-to-consumer and omni-channel capabilities across both brands. While the environment is likely to remain challenging in 2017, we have a strong balance sheet and continue to aggressively manage costs in order to continue our investments in strategies to provide our customers with compelling new experiences through a clearly defined brand voice, to position our business for sustainable growth.”