US: Abercrombie & Fitch Q3 profit jumps 40.5%
- Q3 net income surges 40.5% to $71.5m
- Net sales rose 9% to $1.17bn from $1.08bn
- Comparable store sales fell 3% in the quarter
Improvements in both its domestic and international businesses have helped Abercrombie & Fitch Co to a 40.5% jump in third quarter profit, the teen-apparel retailer said today (14 November).
Net income surged to $71.5m or $0.87 per share in the three months to 27 October, up from $50.9m last year.
Net sales rose 9% to $1.17bn from $1.08bn, with US sales flat at $818.6m and international sales surging 37% to $351.1m.
Total company direct-to-consumer sales increased 20% to $158.3m, with a 15% rise in US sales and a jump of 31% internationally.
Comparable store sales fell 3% in the quarter, with a drop of 4% for Abercrombie & Fitch, 3% for Abercrombie Kids, and 1% for Hollister Co.
Lower average unit costs contributed to a 240 basis points rise in gross profit rate to 62.5%.
"These significantly improved financial results reflect progress on several fronts over the past quarter," said CEO Mike Jeffries.
"Our US chain store business posted healthy growth on top of a strong quarter a year ago, and we saw sequential trend improvement in our international business."
The results are in contrast to its second quarter, when the retailer saw net profit fall 51.6% on slower sales in its international stores and the first drop in US same-store sales for three years.
It had earlier earmarked a further 180 underperforming stores to close over the next few years to improve efficiency and reduce expenses - on top of the 135 stores closed in the past two years.
And in September Abercrombie & Fitch hired investment banking firm Goldman Sachs to fend off pressure from investors.
The retailer, which operates a total of 1,067 stores, now says it expects full year earnings per share of $2.85 to $3.00, based on a mid single digit percentage drop in fourth quarter same-store sales.
Teen clothing retailer Abercrombie & Fitch has confirmed plans to close up to 50 stores in the US this year as it revealed a downbeat forecast for the first quarter. ...
Abercrombie and Fitch is investigating calls for its clothes to be taken off the shelves in Germany after tests revealed high levels of cancer-causing chemical Benzidine....
Teen clothing retailer Abercrombie & Fitch has promoted Amy Zehrer to executive vice president of stores....
- TPP trade pact in milestone signing by 12 nations
- Cheap polyester contributes to cotton import shift
- Combating the new normal – 10 trends for 2016
- Under Armour defends questions over strategy
- US apparel retailers' January 2016 sales roundup
- Bangladesh factory fire renews worker safety fears
- China factory activity continues to deteriorate
- Southeast Asia – a strategic sourcing review
- H&M and Primark price rivalry reaches equilibrium
- PVH to take control of Tommy Hilfiger China unit
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Wearable technology: The future market potential for smart garments and e-textiles
- Global market review of denim and jeanswear – forecasts to 2021
- Wearable Technology Market by Product, Application, Type, & Geography - Global Forecast to 2020
- E-Textiles: Electronic Textiles 2014-2024